As Internet penetration in India is on the rise, the e-commerce sector in the country is likely to witness a growth of over 50 per cent in the next 5 years, says the Economic Survey.

The government document, however, raised concerns over consumer safeguards and proposed amendments to the Consumer Protection Act.

“India’s e-commerce market is expected to grow by more than 50 per cent in the next five years,” the Economic Survey 2014-15, tabled in Parliament today by Finance Minister Arun Jaitley, said.

As per industry body Internet and Mobile Association of India (IAMAI), as of October 2014 India had 278 million internet users.

On the hurdles being faced by the sector, the Economic Survey said: “Inventory management, logistics planning and resource availability are important hurdles for online retail in India.”

It further said, “Consumer safeguard being another concern for consumers of e-commerce, the government proposes including sufficient provisions in the ongoing amendment to the Consumer Protection Act, 1986.”

Prime Minister Narendra Modi had set up a Task Force last year to give suggestions to drive up revenues of India Post in with various services including e-commerce.

The Task Force, which submitted its report in January this year, recommended setting up a holding company under the Department of Posts to roll out of banking, insurance and e-commerce services by the world’s largest postal network.

The task force added that rural India should be the main target area. India has a postal network of over 1,55,015 post offices of which 89.76 per cent are in the rural areas.

Telecom Minister Ravi Shankar Prasad has on several occasions said India Post with its unparalleled rural, urban and semi-urban reach is best suited to offer delivery services to e-commerce players.

According to consultancy firm PwC, the e-commerce sector has grown by 34 per cent (CAGR) since 2009 to touch $16.4 billion in 2014 and is further expected to touch $22 billion in 2015.

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