Purchasing pure handcrafted brass kitchenware from a small firm in Jaipur or authentic black earthenware from a local entrepreneur in Manipur, while being abroad, is a long arduous process. If the government’s recent efforts take firm root, Indian MSMEs may soon be able to sell such goods through e-commerce platforms directly to foreign buyers without much hassle.
The government is likely to ease several regulatory requirements for e-commerce platforms and make it easier for the small and medium enterprises to scale up their exports, sources aware of the matter said. The centre is pushing both the global and domestic e-commerce players to handhold small businesses into the export markets by getting them integrated closely with the existing export promotion council framework.
India has set a target of $200-300 bn in in e-commerce exports by 2030. The commerce ministry already signed an MoU with Amazon last year asking the e-commerce giant to integrate its export navigator tool within DGFT's Trade Connect portal to help small and medium-sized businesses and entrepreneurs understand export compliance requirements.
“E-commerce remained one of our priorities alongside district level exports and if both these can be enhanced simultaneously, it will benefit the overall Indian exports. We are pushing the e-commerce platforms to reach out to the exporters and build more awareness especially among the district exporters to help them get on-boarded. We have asked the states to invite the e-commerce platforms, be it the domestic players or the global players to help the exporters scale up and transit a domestic business to an exporter,” said an official.
A few months ago, the govt had relaxed some provisions. For instance, in July, it allowed foreign-funded e-commerce companies to operate an inventory-based model exclusively for exports purposes, which was previously restricted under the foreign direct investment (FDI) policy. In the last Budget, the government also removed the Rs 10-lakh per-consignment value cap on courier exports so that small businesses, artisans and startups can access global markets through e-commerce channels.
“Ease of doing business remains a continuous process. E-commerce expansion remains a priority, alongside greater utilisation of free trade agreements (FTAs). Awareness building is also in focus to ensure better utilisation of these agreements,” the official said. The government does acknowledge that regulatory complexity, warehousing requirements, logistics costs and limited awareness of export procedures have often been major hurdles for smaller businesses to tap export markets.
The centre is monitoring the progress of these initiatives at the district level, the source said. The focus in not only on the bigger global players such as Amazon and Flipkart, but also on the states. The government has taken measures and policy decisions that could aid smaller businesses leverage the network of the e-commerce players. For instance, in the latest GST Council meeting, a simplified registration mechanism has been approved that will allow eligible small sellers to use an e-commerce operator's warehouse as their principal place of business in states where they do not have a physical presence.