Why a Single Regulator For E-commerce is Needed to Boost the Travel Industry?

With this government policy, the potential of the industry is set to grow

learn more about Saurabh Sharma

By Saurabh Sharma


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India is a large market for travel and tourism. The country offers a pool of tourism products and offers - cruises, adventure, medical, wellness, sports, eco-tourism, and films along with rendezvous with rural and religious tourism.

India's travel and tourism industry is burgeoning; it contributed a total of 208.9 billion U.S. dollars to GDP, which accounts for approximately 9.6 per cent of total GDP, in the year 2016, as per reports. Also India is chasing China; it registered second highest tourism GDP contribution in Asia- Pacific, behind China in 2016.

A national regulator for e-commerce is a step that will further boost travel e-commerce industry in India up to 30% in the next 5 years, say many travel experts. This move will organise the entire travel space, which eventually will help everyone in the chain especially the end consumer. Also, the industry estimates that travel and tourism industry's share in the GDP will grow up by 1% in next 5 years.

With the favouring government policies and encouraging ecosystem, the potential of the industry is set to only grow.

How a single regulator for e- commerce will help travel industry? Seven points to take a note of:

  1. The move to bring a single regulator for the travel industry will organize the entire travel space, which eventually will help everyone in the chain especially the end consumer. Today the entire travel industry is fragmented and works in silos; this isolation needs to be mitigated and better coordination and assimilation can be achieved through a single regulator.

  2. The single e-commerce regulator will ensure one umbrella that will drastically reduce the multiplicity of compliance and authorities to deal with, offering seamless business ecosystem. Currently, there are multiple agencies like Department of Industrial Policy and Promotion, Ministry of Finance, Ministry of tourism, RBI, etc, which deal with e-commerce players so forming an umbrella policy will ensure a homogeneous policy and surely reduce the multiplicity of law enforcing and government agencies to comply with.

  3. Additionally, it will prevent the monopolistic tendencies of big players to usurp the market and infuse competitiveness and fair play in the travel business. The big players have the tendency to take over the market in particular domain which impacts smaller players, thus a single regulator and uniform laws will prevent this trend. The single regulator will also encourage local companies to innovate and explore their potential within their own country, inviting more competition and thus evolution of better products. The local companies will find a leg-up as the single regulator will have options for promoting local innovations where big players can't monopolistically set the industry trends and practices.

  4. As per the regulation, government intent for e-commerce and social media firms to exclusively store customer data locally is a great move as it will bring much-needed transparency in the travel and tourism sector and address the privacy issues of business as well as customers. The local storage of data will prevent the data leaks and misuse and will address to the company and customers privacy issues.

  5. Also, it will help the government to keep a check on airlines' quarterly or yearly functions and reports, enabling enhancement in the working of e-travel industry and boosting the confidence of future travellers.

  6. Additionally, the consumer feedback will drastically improve which will help travel companies to improvise their processes and services, and thus, will be a great mover for the industry to leapfrog. A lot of domestic start-ups will bring in technology innovations with platforms which will improve the processes and quality of service at affordable costs.

  7. Also, the companies in travel business will now need to adhere to the GDPR regulations along with Indian regulations like information technology act, so that the data protection policy in India is in place for travel e- commerce companies, especially those with global business reach. This will ensure a strong compliance for all the players, which intend to operate globally, as the verification of certification will be common for all.

Though the policy is at the draft stage now, once approved this will benefit the consumers, and operators equally.

Saurabh Sharma

Director, Travel Unravel Holidays Private Limited

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