Need overall reforms for e-commerce and other service sectors to prosper

What use are superfast broadband and mobile networks and secure internet payment gateways when India’s internet commerce revolution, already worth billions of dollars, is stumbling to get its goods moved from place to place and, ultimately, to the hands of consumers? A story in this newspaper pointed to the real risks posed to e-commerce by the failure of commercial airlines, rising costs of carrying cargo by air, and the failure of efficient road or rail transport networks to pick up the slack. The first victim of the aviation boom excess in the mid-2000s was Kingfisher Airlines, which collapsed due to costly acquisitions, excessive spending and other financial woes. Today, SpiceJet, which has already changed hands a couple of times and gone through a near-death experience earlier, is near collapse. So are its cargo services.

If this trend continues, fear e-tailers, their businesses will become unviable, as the steep discounts and round-the-clock availability they offer customers will be dented. The former will be affected by airlines charging oligopolistic prices for cargo, the latter by interrupted services as more aircraft are grounded. To add to everyone’s woes, privately-built airports in big cities have high charges that add to the costs.

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