Regulatory Policy Changes Will Help E-Commerce Exports: Niti Aayog
Chennai: E-commerce exports from India, which currently account for $2 billion, have a potential to grab a larger share of the $8 trillion global B2C e-commerce market by the end of this decade if regulatory policies are supportive, finds Niti Aayog.
As the majority of MSME exporters are generating revenues of around Rs one crore, it will be feasible for them to utilise e-commerce as that would lower their customer acquisition cost.
India’s e-commerce exports stands at $2 billion, which is 0.5 per cent of the country’s exports and 0.25 per cent of the global B2C e-commerce exports. This is largely due to the lack of awareness about the channel and the regulatory policies that do not adequately support the nature of the business.
“However, there is an immense potential for India to significantly expand e-commerce exports in the coming years,” said Niti Aayog.
Projections indicate that by the end of the decade, e-commerce exports have the potential to grow to $350 billion accounting for one-third of its exports, as the global B2C e-commerce market expands to $8 trillion.
MSMEs in China are already exporting goods worth over $200 billion through e-commerce platforms while India's e-commerce export is barely $2 billion. According to Aayog, one key reason for this gap is the cumbersome compliance process associated with exports, especially when it comes to payment reconciliation, which is particularly challenging for a new or small exporter.
In order to boost e-commerce exports, it is essential to create distinction between Exporter on Record (EOR) and Seller on Record (SOR), allow reduction in invoice value without any percentage ceiling for all e-commerce exports, introduce annual financial reconciliation process for e-commerce exporters, exempt import duties on rejects or returns, consider an exemption on reconciliation requirements for shipments up to $1000 until National Trade Network is implemented, and creating a green channel clearance for e-commerce.
