Policy for e-commerce exports

June 30, 2023

GS Paper III Indian Economy

Context:

The new Foreign Trade Policy (FTP) 2023 took several initiatives to increase the value limit of exports through couriers by increasing e-commerce exports from ₹5 lakh to ₹10 lakh per shipment.

The status of e-commerce:

Current e-commerce exports in India: The e-commerce exports from India are valued at $2 billion, which is less than half a percent of the total exports of $447.46 billion in 2022-23.
Global e-commerce exports: Global e-commerce exports are estimated to reach $2 trillion by 2025, indicating significant growth potential.
Potential growth for India: To explore the potential of e-commerce exports in the range of $200 billion to $250 billion by 2030, India needs to address the challenges faced by SME exporters by formulating an e-commerce export policy.

Challenges with e-commerce exports in India:

Infrastructural Barriers: Lack of proper infrastructure, such as warehousing and transportation, makes it difficult for e-commerce businesses to scale and reach reac a larger audience. -I IL. I
Payment and Financial Services: Access to payment and financial services, especially for small businesses, is still a major challenge.
Lack of Trust: Customers are often hesitant to make online purchases from unfamiliar websites, which can limit the growth of e-commerce exports.
Shipping and Delivery: Shipping and delivery of products to foreign countries can be expensive and time-consuming, leading to dissatisfaction among customers.
Customs and Duties: Complex customs and duties regulations can make exporting goods challenging and time-consuming.
Cybersecurity: E-commerce websites are vulnerable to cyber attacks, which can lead to loss of sensitive information and negatively impact the reputation of the business.
Lack of Standardization: Lack of standardization in terms of product quality, delivery, and customer service can make it difficult for e-commerce businesses to gain a competitive edge.
Competition from International Players: Competition from well-established international e-commerce companies can make it difficult for Indian companies to grow ana succeed in tne global market.

What are the Related Steps taken:

Free-trade Agreements: To Encourage Cross-Border Trade, the government has signed various Free-trade agreements with countries such as the UAE, the UK, Australia, and others, which has led to a rise in exports.
Digital India initiative: The Digital India initiative has provided solid impetus to other government-led initiatives, including Start Up India and Aatmanirbhar Bharat, which have great potential to translate into lobal success.

How can India lead the E-commerce Export Market?

Creating more Awareness: Creating awareness about e-commerce exports is crucial in promoting and increasing the growth of this industry.
- Education and training can help in gaining a better understanding of the benefits and opportunities offered by e-commerce exports.
- Networking events which can serve as a platform for businesses and individuals to connect and share ideas.
- Marketing campaigns can also play a crucial role in creating awareness about e-commerce exports.
Improving Infrastructure: India needs to invest in better infrastructure facilities such as roads, ports, and warehouses to make it easier for e-commerce companies to export their products.
Simplifying Export Regulations: The government can simplify the export regulations and procedures to make it easier for e-commerce companies to start exporting.
Encourage Foreign Investment: The government can encourage foreign investment in the e-commerce sector to bring in more resources and expertise to help companies grow.
Developing a strong logistics: A strong logistic etwork is crucial for e-commerce exports, and India needs to develop this network to ensure that products reach their destination on time.
Building Strong Partnerships: The government can build strong partnerships with other countries and organizations to help Indian e-commerce companies access new markets and find new customers.