The global economy is in a slowdown following a series of interconnected events such as the Covid pandemic, the Russian invasion of Ukraine, high inflation, geopolitical tensions and supply chain disruptions. According to the World Trade Organization (WTO), growth in global trade in goods is likely to slow to 1.7% in 2023, from 2.7% in 2022.
India seems to be coping well in this uncertain situation. It is one of the fastest growing economies in the world and is expected to grow at around 6% over the period 2023-2024 while the global economy grows at around 2.8%. In 2022–23, India exported $766 billion worth of goods and services. It plans to reach its $2 trillion export target well ahead of the 2030 deadline.
A key driver of India’s sustained high growth has been the e-commerce sector. In 2022, India was ranked as the fourth largest e-commerce market, with projected overall growth of 13.9% between 2023 and 2027. In 2021, more than 348 million users made online transactions and almost 140 million made online purchases. According to Invest India, India’s cross-border e-commerce trade will reach US$350 billion in gross merchandise value annually by 2030. E-commerce is proving to be a savior amid supply chain disruptions, providing a livelihood for sellers and the ability for consumers to go anywhere in the world to purchase products at competitive prices.
Aware of the benefits of connecting exporters to e-commerce platforms, the Foreign Trade Policy (FTP) 2023 includes a dedicated chapter on facilitating e-commerce exports. It offers e-commerce exporters a range of trade facilitation measures, including extending all system benefits to e-commerce exports and increasing the value limit of exports by courier services ₹5 lakhs up ₹10 lakh per shipment. The FTP also announced special outreach and training activities for micro, small and medium-sized enterprises (MSMEs) engaged in e-commerce export. MSMEs accounted for almost half of India’s total exports in 2020-21 and are increasingly using e-commerce platforms to expand their reach both domestically and internationally. Online marketplaces like Amazon and Snapdeal have enabled MSMEs to sell their products to customers around the world. Going online has helped MSMEs serve a larger customer base, thereby increasing their sales and profits. The government wants its share of exports to increase to 60%, which can be achieved by engaging with online platforms.