Linking Of India Postal Department to E-commerce.

India post in 2016 October, put in place an agreement for supply and distribution of ‘Gangajal’ sourced from Rishikesh and Gangotri through post offices across the country, as the government attempted a novel way to utilize the PSU's potential.

 To cope and compete with the advancement in technological developments in recent years, India Postal Department has reincarnated itself multiple times. India Post now acting as a multi-facility provider has extended its service in Core Banking Solutions, Money Transfer, Foreign Exchange, Railways Ticketing, Issuing Passport, Providing LPG subsidies and distribution of MGNREGA funds, to stay relevant.

Indian postal network with 1.5 lakh post offices is the largest in the world. India Post has good penetration in rural India and tier 2 and 3 cities. Out of 1.5 post offices, 1.39 lakh post offices are located in rural India.

However, India Postal Department is one of the top loss-making entities among PSUs. In the Financial Year 2019, India Post incurred a loss of 19,000 crores and 1554 crores during 2020. There have been voices and suggestions to link the postal services with e-commerce for optimal use of its wide-spread network across the country.

Ravishankar Prasad in 2014, then minister of Communication and Information Technology replying to a question had told Lok Sabha that- the Department of Post is offering its existing product and services like speed post, Express parcels to all the customers including e-commerce companies like Amazon and Flipkart.

Indian Postal Department Annual Report 2021-22 highlighted that, ‘A dedicated Parcel Directorate, has been formed in the year 2018, as a business unit with focusing on infrastructure creation and operations of handling parcels, especially from, e-commerce generated business to increase parcel handling capacity from existing nearly 3.3 lakh items per day to 5.7 lakh items per day by 2026 and to capture a greater share of the CEP (Courier, Express and Parcel) market.

The report says ‘Since its inception in 2018, the parcel directorate has taken a number of initiatives like creating of dedicated parcel network, Upgradation of parcel hubs, setting up of Nodal delivery centres and o developing a network of road transport routes’, to bring reliability and improvement in the quality of services and delivery benefits of e-commerce, across the country, especially in rural areas.’

According to IBEF (India Brand and Equity Foundation), The Indian e-commerce industry is growing rapidly in India. It is expected to surpass the US to become the second-largest e-commerce market in the World by 2034. Linking of India Post Department to e-commerce can be a good option to explore in this context.