90% of Indian MSMEs Find E-Commerce Export Ecosystem Challenging
A recent poll conducted by Empower India revealed that nearly 90% of Indian MSMEs and exporters find the current e-commerce export ecosystem difficult to navigate. The poll aimed to shed light on the state of e-commerce exports, identifying key barriers to growth and the support required to unlock India's full export potential.
India's e-commerce market is expanding rapidly, and there is growing optimism among sellers about the prospects of e-commerce-led exports. A significant 72.7% of poll respondents saw e-commerce exports as a substantial opportunity for growth, highlighting the need for policy support to fully harness this potential. The positive response reflects the confidence of Indian sellers in contributing to the country’s export success.
However, despite the optimism, Indian MSMEs identified several challenges, with compliance and fees being the main barriers. An overwhelming 94.8% of respondents called for simplified compliance processes to make starting and scaling e-commerce exports easier. The announcement of the establishment of E-Commerce Export Hubs (ECEHs) in this year’s budget is expected to provide much-needed relief to these businesses.
“These findings reveal both a challenge and an opportunity. Compliance burdens and logistical challenges are eroding India’s competitive edge in the global e-commerce market,” said K. Giri, Secretary General of Empower India. “By prioritizing simplified regulations, affordable shipping, and robust support systems, India can solidify its position as a leading e-commerce export hub.”
The concerns raised in the poll align with long-standing recommendations from stakeholders advocating for reforms to enhance e-commerce exports. Suggested measures include simplifying provisions for small-value bills, allowing direct reporting to the Export Data Processing and Monitoring System (EDPMS), and enabling quarterly aggregate reconciliation without the current 25% variance cap.
According to a recent EY report, the Indian government has set an ambitious target of achieving $200-300 billion in e-commerce exports as part of its $1 trillion merchandise export goal by FY 2030. To reach this target, India would need to increase its e-commerce exports by 50-60 times the current levels. Giri emphasized that addressing the challenges highlighted by MSMEs is crucial for unlocking the untapped export potential and positioning India as a global leader in e-commerce exports.