The commerce and business was mostly local before two centuries ago.

Then, came the Industrial Revolution in which goods were being produced at massive scale. The aim was not only to cater the local market but for the export purpose as well. Now, in today s world, companies are increasingly becoming the global phenomenon. They are poised to open their Greenfield ventures outside of their home countries. Many companies are growing by leaps and bounds and are aggressive towards the cross-border acquisition. The primary force behind this changing global commerce has been Technology . It has change the way business is done. Technology has increasingly reduced the operating cost of commerce, has made the transaction smooth and business efficient. The dotcom boom has widen the scope of commerce and e-commerce has taken the centre-stage. Not only e-commerce, in today s world, M-Commerce (Mobile Commerce) has been also growing by leaps & bounds. As the sale of smart-phones like iPhone, Android based phone, Blackberry and Windows based cellphones are being sold in millions, the use of interent on cellphone has been growing in double digits. If we look at Indian commerce companies like Flipkart, Snapdeal, shaadi.com etc, it feels that this e-commerce was started a few years ago. It would be wrong to assume that. E-commerce in India had been started during the boom of dot.com period in late nineties. There were thousand of small start-up by home grown entreprenurs who wanted to create a giant akin to ebay and Amazon. Western Venture Capitalists had been vying to invest in e-commerce in India. So many venture capitalists had onvested millions of dollars of in e-commerce start-ups. In fact, there was impressive growth. But then, there came the dot.com bust in 2000s and NASDAQ crashed. Suddenly these start-ups find it hard to stay afloat and most of them were bust. Finance had dried up and there was no hope for them.

K. Vaitheeswaran, the CEO of Indiaplaza, remembers the moment vividly. Many venture funds of that vintage perished. Entrepreneurs were worse off. There were

cool. says Vaitheeswaran.com & Rediff managed to survive. fax.almost 1. shaadi. Hell had frozen over. lambs to the slaughter . electronic payment and money transfer system. Rediff was selling knick-knacks on its e-commerce channel. TV. anywhere. it is a new way of conducting. so much life had been unleashed.com wanted to find your dream other . Fabmart and Firstandsecond. inheritors to naïve. dotcom had gone from meaning hip. It is a phenomenon. which is drastically reshaping the parameters of trade. Historically. e-commerce has existed for the last two decades in some form or the other but the spread of Internet has become a new force popularizing it. Could something have survived Forbes Magazine 11 Feb. 2012) spirit. Infrastructure for E-commerce Though e-commerce is spreading its wings very fast. In the space of six months. derring-do the carnage? (Courtesy: The National Association of Software and Service Companies (NASSCOM) defines e-commerce to include all µtransactions where both the offer for sale and the acceptance of offer are made electronically¶6. These are telephone. Apnaloan was promising to sell loans online. But so much chaos. paper tigers.com wanted to be the Amazon the giant book store of India.com bust. Shaadi. electronic data interchange and Internet. The Internet provides access 24 hours a day. Sify too had joined the bandwagon. managing and executing business transactions using modern information technology. seven days a week --any time. All of them closed down. Although. But suddenly there was no hope for them after the dot.000 e-commerce businesses in India at that time. . Six main instruments of e-commerce have been recognized by WTO.

The most creative use of ICT seems to be in the application of other computer-based technologies. which is the world¶s largest producer of milk and dairy products11. where payment was based on volume and the butterfat content. One such example is that of the Indian Tobacco Company in Uttar Pradesh. It started with the setting up of a well-organized co-operative movement of dairy producers in Gujarat. Another example of creative use of sophisticated ICT relates to fishermen living on the Andhra Pradesh coast of the Bay of Bengal and on the Kerala coast of the Arabian Sea. ICT also . in order to meet local needs better. replaced by a local design of the computer-based assessing equipment. The ISRO scientists translate the digital satellite information into maps of the offshore fishing areas. therefore. etc. time and place are no longer the constraint. In both these areas. which are transmitted by telephone or fax to the coastal regions. It is an instrument in the pursuit of other goals. individual milk producers brought their milk to the central collection point. one of the applications that has been successfully adopted in India relates to the dairy sector. This totally automated butterfat assessment machinery was of European manufacture and functioned poorly in Indian conditions. the ITC has developed a grower. sophisticated satellite technologies are placed in the service of local fishermen to improve their livelihood. the private sector has also singly participated in such projects. marketing nexus and enabled each player to benefit. It diminished delays and complaints and satisfaction of suppliers increased considerably. but assessing the butterfat content was a complex process. Complaints and charges of fraudulent assessment were frequent. in turn increasing the probability that fishing expeditions will produce profitable results. ICT is not an end in itself. This meant lengthy delays before payment. In this case. Initially. Investment in ICT helps not only in achieving economic growth but also in helping the society in a variety of ways. satellite based information.Thus. less expensive. Ocean temperatures help predict where fish are most likely to be found offshore. ICT plays an important role in improving the efficiency of industries. it is important to understand that there is no contradiction between ICT and the other critical human and social goals. Here. linked with the stage of development and resource strength. The new process was transparent. The ITC project suggests that the interventions. the expensive imported variety was used at the milk collection centres. This computer-based equipment shows a final output that automatically combines the volume of milk with butterfat content to yield a payment chit immediately cashable by the farmer. In fact. This was. the use of the ICT has helped this industry. partially automated and needed some human intervention but it gave accurate butterfat readings in a few minutes. which has lead to the development of the community. in a particular geographical location can benefit rural masses considerably12. including embedded chips. scientists from the Indian Space Research Organization (ISRO) download information on ocean temperatures from the satellites. This results in knowledge transfer as well as improved industrial organization. E-commerce builds on the structures of traditional commerce by adding the flexibility offered by electronic networks. Traditionally. It enables firms and industries to be competitive in an open economy through increased information flow. It was less sophisticated. The ICT and the Economic Development: The Strategy for India In this context. Also. Volume was easily ascertained. In addition to private-public participation. This facilitates improvement in operations leading to substantial cost savings as well as increasing competitiveness and efficiency through the redesigning of traditional business. To illustrate this point. The solution to the problem involved the use of partially automated equipment.

Many other such case studies of projects successfully implemented in Andhra Pradesh for public convenience are detailed in Chapter 6. the Internet removes distance-related barriers that have traditionally determined the location of service providers and goods producers. businesses buy much more online . It is encouraging to note that the Indian enterprises have begun to derive advantages from adopting e-commerce. reliable. failure to use local language and content13. in the managerial culture of enterprises. and lack of entrepreneurship and a business culture open to change. In particular. And ‡ Creation and maintenance of a citizen database that can be used in a variety of ways such as public distribution system. shortage of requisite human capacity. insufficient telecommunications infrastructure and resultant low Internet connectivity. The trends in the development of ICT. and private businesses in an efficient. changes in the legal framework. access is by no means the only bottleneck in the development of a digital economy. transparent and integrated manner through a chain of computerized Integrated Citizen Service Centers (ICSC). offering a wide spectrum of citizen-friendly services which help people save time that would otherwise have been spent running around various departments. indicate that the world economy is becoming an ICT-based economy. known as e-seva kendra. if scarcity or language represents an important barrier). issue of individual identity cards. in ensuring better targeting in all the poverty alleviation programmes etc. as given in Chapter 2. saving time and money for all the citizens. A high number of Internet users does not necessarily mean a high rate of ecommerce activity. Despite the wide range of benefits that can be brought about by ICT. and the development of business process outsourcing are indicative of the trends in Internet access. However. ICT has become an important tool for improving productive capacity and increasing international competitiveness by reducing the transaction costs. Although security concerns may be holding it back. transparency and democracy. The above illustrations point out the fact that the ICT can be beneficially used keeping in mind local needs. Reasons for this include lack of awareness of what ICT can offer. and in consumer attitudes and habits. These projects relate to: ‡ E-seva kendra. In addition. accurate and efficient aggregation of large amounts of data generated at the mandal levels for performance monitoring and analysis. among other things. then the technological conditions for the adoption of ICT for businesses are probably not being met.e. If citizens find it difficult to use the Internet (i. at both the micro and macro levels. it also requires. It provides a one-stop venue for services of various state and central government departments. its adoption by India has so far been limited. the increasing social and economic importance of open source software. ‡ Computer-aided Administration of Registration Department relating to the system of land registration through electronic delivery of all the registration services. absence of adequate legal and regulatory frameworks. the policy framework for the promotion of e-commerce for development. ‡ Computerization programme covering all levels of the administrative spectrum of the Mandal Revenue Offices (MRO) to ensure quick. Broadband Internet access may accelerate the growth of Internet traffic and change the way people and businesses use the Internet. expensive Internet access. as defined by the local people.makes possible the emergence of new activities such as online outsourcing of services and production of different types of goods. By lowering transaction costs.

most firms and industries are still excluded from its ambit for want of infrastructure required for its use. Other priority areas include basic access to ICT. These studies cover different time periods. Despite the important opportunities that the knowledge economy offers for growth of countries such as India. it will be appropriate to suggest that the Indian Government fosters an improved understanding of best practices in the use of ICT. and e-governance. building infrastructure. and broadband makes such content more accessible. low cost hardware and software. In this regard. Increasing . In spite of all these studies. lack of local Internet leads most people to purchase online from foreign sites (mainly from developed countries) rather than local or even regional sites. various countries and regions and examine the impact of ICT at the firm and industry levels. In this context. India has also legislated its Information Technology Act15 and prepared an Action Plan16 to have long term planning in this area. both for infrastructure (including foreign direct Investment) and for the development of small and medium enterprises (SME). changes in legislation. Also. Furthermore. All of this results in wealth generation. taking samples of large and small firms. education and training of labour force. especially to small and medium size enterprises (SMEs). labour productivity and total factor productivity. Formulating and implementing national ICT strategies is perhaps the biggest challenge the policy makers face. Since the late 1990s. therefore. thus ensuring future sustainable economic growth. deregulation of telecommunications. It indicates that through the application of the ICT. Enhancing awareness and public understanding about the benefits of ICT is an important starting point in the planning of ICT policy. a technology that allows automated interaction over the Internet between computers managing different businesses. more sellable. has had a dramatic impact on the efficiency of processes such as inventory control and routine purchasing. it is important to highlight that ICT is an µenabler¶ of economic development and growth. Government should support the development of infrastructure that will provide greater access to low-cost. the development of Web services. People must be trained on how to use ICT and exploit commercially the information and knowledge they make available. in many of the developing countries. These cover a broad range of policy areas. The National ICT strategy of Thailand is considered as an example of a developing country¶s strategy for expanding its information society. As a result. financing needs to be available. high-bandwidth Internet connections and the use of affordable software will play a leading role in addressing skill deficiencies in the workforce through training and education. firms become more competitive. Many studies indicate that ICT has a positive and considerable impact on capitaldeepening. the gap in the use of ICT between developed and developing countries remains wide. and deserves particular attention in the planning framework. easier to use and.content than consumers do. regulatory frameworks need to be established to provide enterprises and consumers with confidence in the security of the Internet. This promotes productivity growth14 in the economy. so that optimal choices can be made regarding the most efficient use of ICT. there is little systematic empirical evidence regarding the economic consequences of ICT. such as raising awareness. Initiating the right policy framework for the development of ICT involves many difficulties. new markets can be accessed and new employment opportunities created. and the use of local-language Web sites. India has made efforts at launching its own national ICT programmes and strategies. Keeping the results of the available studies in mind.

awareness is important in the use of e-commerce. People start using it only when they have contain analysis. Introduction Objectives Methodology Research Findings Conclusion Limitations Recommendation bibliography .