Sorry, business closed until internet is back on
Vadodara: A household name in Vadodara, Jagdish Farshan has been famous for Gujarati snacks like Leelo Chevdo and Bakarwadi since 1938. Since the year 2000, they started exporting their snacks to the millions of Gujaratis settled across the globe, especially in Africa, USA, Australia, Canada and New Zealand. It is one of the many indigenous businesses that helps Gujarat contribute 25% of the total exports from India. But the outfit synonymous with both tradition and modernity for 79 years, was also one of the many exporters to receive an unexpected jolt in August 2015, during the week-long internet shutdown during the Patidar protests for reservations across the state.
Kalpesh Kandoi, the chairman of Jagdish Farshan Pvt Ltd says, “Gujaratis in various countries buy our snacks online through our website, or through email. During the internet ban, we suffered quite a lot due to the blockage of orders and failure of deliveries.” Since nearly 50% of their annual revenue comes from exports, the shutdown threw a significant spanner in the works. Although the government claims it banned only mobile data, many businesses admit to their broadband and WiFi also being hit, or seeing debilitating delays.
“Of course, if there is an emergency from the importers’ side, they can call us directly,” says Kandoi. “But then again, a kind of inconvenience is created to them from our side, which is very shameful. It destroys our trustworthiness and credibility.” Many of their production centres in Gujarat, especially Vadodara, fell back on meeting orders when bank payments were stuck, or orders weren’t accessible. Thankfully for the company, its manufacturing unit in Australia was able to meet at least some of the international orders when most districts of Gujarat couldn’t access the internet.
The ban seems to have had a domino effect outside India too. Preeti Shah, who imports snacks and sweets from Jagdish Farshan through her small home-based business in the USA, couldn’t meet orders there during the internet ban in Gujarat. She told 101reporters on the phone from Philadelphia that when she started her business of selling Gujarati snacks 3 years ago, she marketed her service by calling her neighbours, friends and acquaintances personally. “I found that in return they emailed me their snack orders,” says Shah. “During the internet blockages in India, I had to apologise for not delivering the snacks to my clients because my orders were not fulfilled by the Gujarat-based exporters.” She lost 12 to 15 clients, most of them regulars. “The government has to realise the impact of the ban. What if I had lost all my clients just because of the internet ban?” she asks.
Gujarat is a major hub for several industries like dairy, automobile, gems, and pharmaceuticals, but its biggest exports are of cotton yarn, oilseeds, and seafood. With its highly advanced and well-equipped marine fish production techniques, it is able to export fish to UAE, Australia, USA, Japan, China, Canada, Brazil, Thailand, and Germany. Gems and jewellery too, though exported from Mumbai, are processed in Surat, Gujarat, one of the largest diamond hubs in the world. Already severely hit by demonetisation in November 2016, with large-scale closures, layoffs and losses, the diamond industry nearly buckled under the internet ban too.
Most of all, it is the unpredictable, ad hoc, and unannounced nature of the internet shutdowns that frustrates exporters, who liken it to annoying roadblocks traffic policemen install to allow VIP movement. For instance, in February 2016, the state suspended mobile internet services suddenly for four hours to prevent cheating during a revenue service exam.
Chandresh Shah, president of the Exporters and Importers (Exim) Club and the founder of Madhav Agro Foods, says that the entire export industry relies on the internet for over 95% of its business. “It is absurd on the part of government to ban internet for any reason especially when they know that it will hamper exporters to a great extent. They have to provide alternatives, or announce beforehand. People who are importing our products consider us unprofessional and we look foolish in the international markets. So such policies need to be revamped and rationalised properly.” He adds that the rising economic cost of such shutdowns must be factored in. A 2016 study by Brookings Institution that looked at 81 instances of internet shutdowns across 19 countries between July 2015 and June 2016 found that they had cost the world economy a total of $2.4 billion. India, at a conservative estimate of $968 million due to 22 shutdowns (as much as Iraq), was one of the biggest losers.
As the digital economy grows, the cost of frequent internet shutdowns will only accelerate. As the central government pushed the ‘Make in India’ initiative, Surat-based Falguni Patel (name changed) was inspired to start an online boutique in late 2014. A textiles student and first-time entrepreneur, she invested nearly Rs 10 lakhs ($15,600) through loans and savings. Unfortunately, a few months into her business, an internet ban was put in place. “It was a sheer coincidence that I received an order from Madhya Pradesh, along with an advance payment, just two days before the week-long internet ban. After that they mailed me four times – first with some requirements, then two follow-up emails and a final one demanding a refund of the advance –but I didn’t receive any of these due to the ban. Meanwhile, I used the advance to purchase raw materials needed.” After the ban was lifted, Patel realised what had happened. “When I called them personally and explained the situation, they called me unprofessional. When I said I would repay their money in 3-4 instalments, they filed a police complaint against me for theft.” Only a single order had turned bad, but it delivered a strong enough blow. Discouraged by the experience, and pressured by her parents who didn’t want her to invest in the business anymore, Patel shut her website, and shelved her e-commerce dreams.
Some companies, like Dinesh Mills, one of Vadodara’s oldest textile companies, prevented losses by invoking their brand value and stepping up customer relations during the ban. Uday Shitole, General Manager – Sales, at Dinesh Mills, says the internet is a boon for the export industry due to its speed, web orders, low cost, and proper documentation. But he admits that in India, it’s mandatory to have traditional back-up systems, even if this is much costlier, because political realities make even something as advanced as the internet unpredictable. Sudhir Purohit, Vice President (Exports), Dinesh Mills Ltd, says their decade-long relationships with suppliers and purchasers, initiated in the pre-internet days, stood the company in good stead. “We export the materials through digital orders too, but in our system, the negotiation of contracts has to be handled in person and non-negotiable ones can be done wholly through the internet. Without this, we will be vulnerable to any disruption, like internet ban, or accidents, that will definitely lead to delays and losses.”