Electronic commerce in India has grown rapidly. It has become the gateway to embracing digitization. Parts of India’s population drifted into e-commerce for the first time during the pandemic. Fear of Covid 19 has driven people to use e-commerce to have their essentials delivered from the security of their homes. In addition, it has also provided jobs for the entire industry at a time when unemployment is at an all time high and the need for survival jobs is skyrocketing.
The industry is constantly innovating, leading to the growth of ancillary industries, and helping consumers with convenience, cost efficiency, and access to a very large market that has no borders. With India’s foreign trade policy under review, the need for e-commerce exports to have a separate chapter is more relevant than ever. The pandemic has led to a restructuring of the global supply chain, a shift in consumer behavior towards e-commerce, and the growth of cross-border commerce. At present, the facility of e-commerce must be exploited internationally to increase Indian exports and give sellers easy access to international markets.
E-commerce has allowed small businesses to grow at an exponential rate by simply connecting them to a larger market compared to traditional retail. There have been sellers on these platforms who started small and by understanding the scope and nuances of e-commerce were able to grow rapidly and serve India-wide. MSMEs will greatly benefit from the scale and scope offered by e-commerce exports. In addition, it will be easier to serve by e-commerce compared to traditional media, as infrastructure inputs will be considerably less. A lower barrier to entry for exports via e-commerce will require a favorable policy framework, which the next FTP should instill.
Prime Minister Modi’s vision of a $ 5,000 billion economy by 2024 will not be possible without an exponential increase in the volume of exports and this can only happen when Indian sellers have easy access to the global market. through emerging export channels such as e-commerce exports. Accordingly, the focus should be on e-commerce as it is the easiest and most profitable way to export.
While foreign trade policy has always favored exports, the timing is currently unusually opportune.
We find ourselves at a time when the Indian e-commerce industry is mature, the workforce is actively seeking opportunities and there is an anticipation of a post-pandemic boom, due to the availability of a workforce. – cheap labor, increased purchasing capacity of entrepreneurs and government wishing to stimulate business. With the term global economy being used loosely in the conversation, the need to include more Indian participants in this spectrum is of the utmost importance. Existing export policies have mainly supported traditional offline retailing. However, with e-commerce seeping into Tier 3 and 4 cities and even many rural areas, it has the potential to transform not only exports but also the lives of everyone who works in this industry.
With MSME empowerment being one of the main themes of the day, formulating trade policies with e-commerce in mind as a means of maximizing exports will help MSMEs lead the charge of moving India forward to the next level. global scale, in the digital age.
Foreign trade policy must specifically target a few areas in order to increase the reach of electronic commerce beyond our borders. Sellers need to be educated on how to maximize exports through e-commerce. It should be mandatory for Export Promotion Councils (EPCs) to promote e-commerce among its members and each CEP should be assigned a specific objective for e-commerce exports.
Logistics is an important part of e-commerce and would require both technological and government support to do it on a global scale in a cost-effective manner.
Developing a low-cost, end-to-end traceable, cost-effective, dedicated logistics solution dedicated to e-commerce exports will help Indian MSME exporters become more competitive when selling in international markets. If India truly seeks to become an export superpower, the digitization and adoption of digitization in India has yet to accelerate in order to rapidly build the capacity of the industry.
Ensuring the end-to-end digitization of customs clearance as well as the closing of shipping invoices in the EDPMS would go a long way in improving the operational ease of exporting. A provision to facilitate smooth re-importation of returned goods should also be institutionalized in the FTP. These are just a few examples of decisive policy steps that need to be taken to promote the ease of doing business and promote India’s e-commerce exports. In addition, the government will need to put in place strict guidelines for quality control, especially with regard to exports. India has a long history of selling two grades of goods, namely export grade and domestic grade.
The production of the highest quality products must be a priority. This can only happen if the government educates potential e-commerce sellers about the expectations of customers in foreign markets – about how high-quality products translate to increased sales and less returns. E-commerce exporters will need a lot of government support and support in the initial stages and will need to be incentivized as well. MSMEs who sell via e-commerce will also need to be trained on how to export their products and the compliances for these and also why they should actively review e-commerce exports. Sellers should also be educated on how to protect the intellectual property (IP) of their products and how to ensure that their products do not infringe the IP of a foreign country.
If Indian MSMEs can facilitate exports through e-commerce, we envision a market of over $ 300 billion per year according to Professor Viswanath Pingali of IIM-A and Professor D. Daniel Sokol of the University of Florida . The currencies that will come from these exchanges will accelerate India’s goal of being a $ 5,000 billion economy. The next FTP should examine all avenues that will facilitate exports via e-commerce. Raise awareness of e-commerce exports through the right channels, get market information, find the right products, etc. are all essential to enable MSMEs to export.
Disclaimer
The opinions expressed above are those of the author.
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