India should aim to export $350 billion through e-commerce by 2030; Separate policy needed: GTRI
India should target $350 billion in goods exports through e-commerce by 2030 and for this the government needs to address the pain points of the sector by taking steps like formulating a separate policy, said a report by economic think-tank GTRI. needs to be removed.
The Global Trade Research Initiative (GTRI) said that the current e-commerce export provisions in India are complications on the rules made for regular B2B (business-to-business) exporters.
The report states that India’s e-commerce exports have the potential to grow at a faster rate than its IT exports in the early 2000s.
Global business-to-consumer (B2C) e-commerce exports are projected to grow from $800 billion to $8 trillion by 2030, driven by India’s strength in high-demand customized products, expanding seller base, and higher profit margins per unit of exports. It has been given place in India. A prime position to profit from this trend.
GTRI has identified 21 action points to accelerate the country’s exports through online medium.
India’s current e-commerce export numbers are well below their potential. Currently, e-commerce exports account for only $2 billion, which is less than 0.5% of the country’s total merchandise export basket.
The report states, “The country should plan to export $350 billion or about one-third of its total goods through e-commerce by 2030. For this, focus should be on developing an ecosystem for e-commerce exports.” May need it.” ,
It added that the existing export provisions for the medium create a heavy compliance burden on small firms.
To address such needs, the report recommended that the government issue a separate e-commerce export policy. Such policies in countries including China, Korea, Japan and Vietnam have helped many firms sell globally.
Since the needs of the e-commerce export sector are quite different from the regular export sector, the e-commerce export policy should be an independent document addressing all the problems faced by the exporters.
It added that the policy should be issued jointly by the RBI, Customs and the Directorate General of Foreign Trade (DGFT) after making necessary changes in their regulations.
This should include provisions for business development, reducing regulatory burden and setting up a national business network.
Redefining Responsibilities of Vendors as suggested by GTRI; Simplifying payment solutions and processes; development of business ecosystem; and the establishment of a national business network for the medium.
Small and medium-sized firms rely on online platforms for global exposure and value-added services such as timely payment assurance.
However, it has been said that this conflicts with FEMA (Foreign Exchange Management Act) regulations as the platform is responsible for receiving the payment, while the ownership of the goods remains with the seller.
The compliance process can be challenging for small sellers due to the high sales volume.
The report states that payment solutions for third-party e-commerce exporters are a major hurdle and RBI’s guidelines for B2B exports need changes to accommodate B2C exports.
To simplify payment settlement, it has introduced longer time for realization of export proceeds, less restrictions on realization of export proceeds, annual financial settlement process; and simplification of foreign exchange payments.
“The deduction cap of 25% is too restrictive for e-commerce sales which include discounts and returns. Exporters need flexibility in placing annual turnover, and the restriction on per consignment should be removed,” it said.
The report also recommended increasing the value cap for e-commerce exports from ₹5 lakh to ₹25 lakh to allow exporters to choose the shipment mode as per their business requirements.
“As most of the trade is shifting to global value chains, which require timely delivery, exporters should be allowed to choose the shipment mode as per their business requirements. China has created an efficient and seamless logistics system to ship goods to global customers.
Further, the government should create a separate customs code for such shipments, in line with global practices, to reduce costs and expedite delivery of goods and allow these exporters to claim GST refunds on rejects. Exemption from import duty and re-import should be treated as duty-free import. ,
It added, “India is focused on developing market information, conducting training for artisans and facilitating the fulfillment of export orders for high potential product categories such as handicrafts, jewellery, ethnic wear, decorative paintings and Ayurveda.” should do.”
With regard to setting up the network, it said, it will bring together RBI, Customs, DGFT, GSTN, India Post, courier companies, platforms and users like Amazon and eBay to form a central technology platform that streamlines the entire process. Is.
GTRI Co-Founder Ajay Srivastava said the internet, technology and secure online payments have made exporting through e-commerce simpler and safer, enabling smaller firms from different cities and regions to participate in international trade Are. Over 100,000 Indian sellers are already exporting through e-commerce, and the number is set to grow.
“Exporting through e-commerce channels can result in higher profit per unit of export as businesses can cut out middlemen such as indenting agents, bulk buyers and shopkeepers,” he added.