Even though the newly released Foreign Trade Policy (FTP) 2023 has laid special emphasis on giving a fillip to e-commerce exports, there is a need to spread awareness and empower MSMEs to sell their products in the global markets through e-commerce channels. Over 90% of these exporters are MSMEs.
The report outlines concerns faced by MSMEs around how e-commerce exports face high return rates as customers are unable to examine products beforehand.
Animesh Saxena, Immediate Past President & Chairman, Intl Trade Committee, FISME lauded the initiatives brought under the FTP for e-commerce exports but said that at ground realities can be different.
“This study has tried to capture the difficulties in the binding constraints. The study suggests a slew of measures like government aid to unleash the ability of MSMEs and MSME entrepreneurs to rapidly expand exports through e-commerce,” he said.
He added that the report also highlights the need to create awareness of the e-commerce opportunities to export SMEs.
Some of the issues mentioned in the report include how returns are treated as imports and face import duties, resulting in high logistics costs and product disposal. Additionally, MSMEs lack digital skills and information on support tools, and there is no comprehensive guide to e-commerce export procedures. For the concerns highlighted, the report indicates the below recommendations and solutions:Some of the suggestions highlighted in the study are as follows:
● A tripartite awareness raising campaign involving Industry and SME associations such as FISME, government and platform owners to facilitate information on end-to-end e-commerce export process.
● Facilitative mechanisms for processes such as the issue of mandatory licenses and registration at the Port.
● A green channel for e-commerce exports with easier documentation and customs process simplification, for timely delivery.
● Standard operating practice for product returns, including avoiding levy of import tariffs on the returns.
● Access to information and benefits available under government schemes for exports.
● Special facilitative mechanisms on cross-border payments.
