'GST will help in e-commerce export, but clarity on policy needed'

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Porisma P. Gogoi | 12 Jun, 2017
Though e-commerce players are expecting a surge in exports after the roll-out of India's landmark Goods and Services Tax (GST) reform, industry stakeholders feel there is a need to expand the categories for benefits under the export policy.

"The subsuming of major central and state taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of central sales tax (CST) would reduce the cost of locally manufactured goods and services," Vishwas Shringi, Co-founder and Chief Executive Officer, Voylla Fashion, told reporter.

"This will increase the competitiveness of Indian goods and services in the international market and give a boost to exports."

A few players in the e-commerce sector feel that under the current foreign trade policy, there is a "lack of clarity" in terms of e-commerce exports.

"The policy is not foolproof right now. It is just an overview… not the in-depth information on what exactly the process and procedure is," Navin Mistry, Director of Retail Exports, eBay India, said. "The custom process of how to ship an item is not so clear," he added.

Under the Merchandise Exports from India Scheme (MEIS), introduced by the Foreign Trade Policy (FTP) 2015-20, the Commerce Ministry gives benefits to several products as "duty credit scrips". However, the category of products in e-commerce exports, which are eligible for those benefits, are very limited, said Mistry.

"The policy is limited to only six categories. It does not expand to gems and jewellery or any new category. There is potential, but people are not aware about. That is the fundamental problem right now," he said, adding that it is a challenge for a very small or a medium-sized player to come online because they do not understand the policy clearly.

According to a study titled "Exploring Potential of E-Commerce for Retail Exports of Indian MSMEs in Manufacturing Sector", the total potential for business-to-consumer (B2C) e-commerce retail exports from India is estimated at approximately $26 billion, of which $2 billion can be achieved by 2020 from 16 product categories.

It highlighted that in order to provide a fillip to exports of micro, small and medium enterprises (MSMEs) through e-commerce, there is an urgent need for the government to recognise retail e-commerce exports as an industry and work towards removing regulatory barriers including reviewing the FTP policy.

The study was jointly prepared by the Federation of Indian Chambers of Commerce and Industry, Indian Institute of Foreign Trade-Centre for MSME Studies and Apex Cluster Development Services. It
was also supported by e-commerce platform eBay India.

E-commerce major Amazon India recently came up with a workshop for small and medium businesses to educate them on the global opportunity, brand building, documentation, listing methodology and services.

"Since our launch in India in June 2013, we have been continually exploring opportunities to support the growth of Indian sellers in the emerging digital economy," an Amazon India spokesperson, who declined to be named, said.

"As part of this, we launched our Global Selling Program here in 2015 that enables Indian businesses to take their 'Made in India' products to millions of active customers across the globe through Amazon's 10 global marketplaces."

Mistry said: "There are policy hurdles, but all fundamental pieces need to work together. It is the fundamental job of the policymakers and all agencies that are part of the chain to enable better ease of doing business."

(Porisma P. Gogoi can be contacted at porisma.g@ians.in)