Cross-border trade is an area of great potential. As the fourth digital business revolution begins, e-commerce is democratizing global markets by opening the door for small and medium-sized enterprises (SMEs) to do business electronically wherever they are. Prime Minister Narendra Modi referred to the digital revolution AI (Artificial Intelligence) when addressing the U.S. Congress during his recent visit to the United States, defining “AI” as America and India. We hope to take the potential of AI partnerships to the next level and increase the e-commerce export potential of millions of Indian SMEs. The crux of the debate is how India can take advantage of its size and capabilities. India’s current e-commerce exports are still well below potential, at just $2 billion, less than half of its $447.46 billion exports in 2022-2023.
Global e-commerce exports are estimated to reach $2 trillion by 2025. With e-commerce potential in the $200 billion to he $250 billion range by 2030, India needs to solve the problem of SME exporters by developing an e-commerce framework. export policy. However, the new Foreign Trade Policy (FTP) 2023 reflects India’s ambition to become an export hub and offers several measures for e-commerce exports to make SMEs a part of India’s exports. I’m here. FTP has made several efforts to increase the cap on export value through couriers by increasing e-commerce export value from Rs.50 lakh to Rs.1 million per transaction. E-commerce provides outreach services for SMEs through ‘Dak Niryat Kendra’ to access international markets from Punjab and other border areas.
Current export restrictions place a heavy burden on exporters, and tend to strengthen exports by small and medium-sized enterprises. The backbone of India’s economy is 64 million small and medium-sized enterprises, which account for 45 percent of Indian production and 40 percent of exports, employing 114 million people and producing over 9,000 commodities for the global market. India’s economy is expected to reach $5 trillion by 2025, according to the Small Business Report FY2021-22, and SMEs are expected to play a key role in e-commerce exports. There are no relevant laws, and e-commerce export companies are expected to grow slightly. It is hard to imagine so many SMEs doing e-commerce export business.
Why do we need a separate e-commerce export policy?
Because e-commerce export requirements differ significantly from general commodity export requirements, an e-commerce export policy should be a separate document that covers all aspects of legal compliance. E-commerce exporters face many challenges, from return policies to payment and compliance issues, he 90% of Indian e-commerce exporters are SMEs. To this end, FISME (Federation of Small and Medium Enterprises of India) has conducted an in-depth study on e-commerce export policies of several key countries promoting e-commerce export business.
Indian SMEs await the enactment of a special e-commerce export policy with a draft entering the public domain in 2019. Since then, the business has grown in many ways, but aims to create a favorable environment for promoting electronic exports. E-commerce policies in countries such as China, South Korea, Japan, and Vietnam have enabled many SMEs to sell globally.
Initially, China dominated cross-border e-commerce, but now even countries like Vietnam and Cambodia have overtaken it. This is because the banks, customs offices and shipping intermediaries in those countries are now ready for all types of high speed international trade.
E-commerce policies should be in line with the amendments proposed by the Ministry of Consumer Affairs in the Consumer Protection (E-Commerce) Act 2020. E-commerce is regulated by the Foreign Direct Trade Law and Consumer Protection Law, as well as by Information Technology Law and Competition Law.
Required green channel
It is important to keep the entire ecosystem in sync. E-commerce export policy needs to be developed jointly by Customs and the Directorate General of Foreign Trade (DGFT) and Reserve Bank of India (RBI) after making necessary regulatory changes such as redefining seller responsibilities and facilitating payments. There is accounts and procedures. The State Trade Ecosystem brings together RBI, Customs, DGFT, GSTN, Indian Post Office, Couriers, E-Commerce Companies and Users as a single green channel for e-commerce exports, easy paperwork and customs clearance. We need to form a centralized technology platform. To ship to ensure on-time delivery.
Another big issue is certificate compatibility. Anyone entering the e-commerce business should be familiar with e-commerce, e-payments, e-signatures, e-delivery and other digital solutions.
Small businesses rely on online platforms for value-added services such as international expansion and on-time payment guarantees. However, this is said to violate FEMA (Exchange Control Act) regulations, as the merchant is responsible for collecting the payment while the merchant owns the goods. Refunds are a major issue for third-party e-commerce exporters and his RBI guidelines for business-to-business (B2B) exporters should be revised accordingly.
The 25% discount limit is limited to e-commerce sales, discounts and returns. Exporters must know their annual turnover and lift all import restrictions. These exporters reduce costs by establishing separate customs regimes for their goods, waiving import duties on rejected goods, and treating returned goods as non-commercial goods, thereby reducing costs and You can expedite the delivery of goods within. This is customary and allows refunds to these exporters.
India allows 100% FDI in its e-commerce model, but does not allow FDI in its inventory-based model. In some cases, merchants, commerce and e-commerce platforms, may ignore rules that prohibit large discounts or merchant privileges. It is also trying to clarify the rules for foreign direct investment in e-commerce.
Way forward
We hope that AI (USA, India) mutual trust sharing can support SME exports and have the opportunity to level the playing field through e-commerce export policies. Educating small businesses about global value chains and applying best practices can help strengthen your e-commerce platform and grow your business. We also need to protect unsuspecting small businesses from cyber fraud. Countries can work with District Industry Centers (DICs) to establish Export Promotion Cells (EFCs) to identify products and markets and meet export compliance.
