Is India’s e-commerce export ready to ride the high wave?

As India emerges as a global leader, e-commerce, one of the fastest growing sectors domestically, is revolutionizing the global market for Indian entrepreneurs, transforming the destiny of ‘Make in India.’

Since the pandemic, customers have preferred shopping from the comfort of their homes, resulting in an estimated 2.14 billion online shoppers worldwide, and the numbers are rapidly increasing. Taking advantage of this vast consumer base, China achieved remarkable success in 2022, with e-commerce exports reaching $300 billion. Now, as India looks ahead, businesses can also aim high.

According to a report by the economic think tank GTRI, India should aim for $350 billion worth of goods exported through e-commerce by 2030. The global business-to-consumer (B2C) e-commerce exports are expected to grow from USD 800 billion to USD 8 trillion by 2030, driven by the wider availability of the internet, the rise of e-commerce marketplaces, on-demand manufacturing, easier access to capital, and diverse logistics and shipping models. This presents a fantastic opportunity for India to establish itself in the global market.

This segment is anticipated to grow at a faster pace than India’s IT exports did in the early 2000s. India’s strengths in high-demand customized products, an expanding seller base, and higher profit margins per unit of export position it favorably to benefit from this trend.

While the gates to the global market are opening, India is still far from realizing its full potential. The GTRI report indicates that India’s e-commerce exports currently account for only $2 billion, which is less than 0.5% of the nation’s total goods export basket. To unlock the nation’s complete potential and streamline e-commerce exports, certain bottlenecks must be addressed.

The Persistent Bottlenecks 

Infrastructure: Despite a considerable focus on infrastructure development, there is a lack of export e-commerce infrastructure, hindering scalability and access to larger audiences. Cumbersome courier and customs procedures, coupled with a shortage of foreign post offices, complicate the process.

Payment services: Accessing payment services, especially for small businesses, remains a major challenge. Simplifying cross-border payments and streamlining closure procedures at banks are necessary improvements.

Delivery: Timely, cost-effective, and hassle-free delivery is crucial for building customer trust and loyalty. However, shipping goods to foreign countries can be time-consuming and expensive, leading to dissatisfied customers. Additionally, tracking last-mile delivery remains problematic for many.

Cybersecurity: New e-commerce websites often face skepticism and are vulnerable to cyber-attacks, impeding the growth of e-commerce exports.

Competitive environment: Well-established international players, both domestic and foreign, pose a significant challenge for Indian brands aiming to establish themselves.

Lack of dedicated e-commerce export provisions: The current provisions for e-commerce exports in India, according to GTRI, are fragmented and derived from rules designed for regular B2B exporters, creating compliance burdens for small firms.

What needs to be done? 

To realize India’s e-commerce export dream, the government must provide support by formulating a separate policy for e-commerce exports. This policy should address the pain points of businesses, facilitate business development, ease regulatory burdens, and establish a national trade network.

Given that 90% of e-commerce exporters in India are MSMEs, the government should devise an e-commerce export strategy focused on empowering MSMEs across the nation to sell their products in global markets.

According to a report by the industry body FISME, increasing awareness, simplifying documentation, streamlining customs processes, and implementing standardized practices for product returns can greatly promote the country’s exports through e-commerce.

Logistical support should be extended to first-generation and small-scale exporters, enabling faster delivery

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