Commerce Ministry gearing up to boost exports through e-commerce

Increasing number of exporters pushing their business through eBay and Paypal
The commerce and industry ministry is gearing up to boost exports through e-commerce at a time when the government is expected to reframe the proposed e-commerce policy, yet again.

Discussions on e-commerce exports kicked off on Wednesday during an informal meet among academia, exporters and officials from the Department for Promotion of Industry and Internal Trade (DPIIT) and the Department of Post, sources said.

According to estimates by citizen engagement social networking platform Localcircles, about 75,000 exporters from India sent out $1.2 billion worth of goods via the e-commerce channel during FY19.

“We are looking at a $450 billion opportunity, which may get considerably squeezed if regulatory and customs policies are not revised soon. As of now, it costs an absurd Rs 1,400 to send a rakhi to Singapore, even as China has increasingly pushed small-value exports through the e-commerce channel,” said Sachin Taparia, founder of Localcircles.

Labour availability and production costs still favour India as well as the production of consumer goods across segments such as home furnishings, medicinal products, apparels, textiles, handicrafts and gems & jewellery, among others, he added.

Currently, customs and postal payments issues remain among the biggest complaints of exporters. During the meet, it was pointed out that the Reserve Bank of India (RBI) should permit inward remittances of 50 per cent of the invoice value at the time of export. This will allow exporters the flexibility to sell goods at a premium based on product demand or at a lower price in case of stock liquidation. 

Demands were also raised for the central bank to allow realisation of exports proceeds up to a period of 24 months from the date of export.

Problems in postal connectivity were also flagged. Local circles suggested having a dedicated e-commerce desk at designated post offices in the top 50 exporting districts.

Postal officials were also requested to integrate their application programming interface with that US Post, Royal Mail and other destination countries so that an exporter or consumer and can track shipment end to end.

“India has been a bit slow in adopting e-commerce for exports but we are looking to integrate the idea in our normal export promotion practices. While our research has shown the diaspora is interested in Indian goods, the chances of boosting export to foreign markets are equally high,” said a senior DPIIT official. The government wants to hold future meetings near export zones.

On Wednesday, it was decided that five working groups would be formed to deal with myriad issues. 

Focusing on financial payments, postal problems, customs bottlenecks, goods and services tax and export promotion, the groups will create suggestions that will be submitted to the government within three months, sources said.

  • Majority of exporters prefer e-comm route even as most online transactions being done on Amazon
  • Increasing number of exporters pushing their business through eBayand Paypal
  • Industry estimates say India Posts needs to reduce postal costs by at least a third to come on a parwith other nations
  • Industry and postal department officials set to meet again to discuss issue

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