Digital Central Window, Easing Import Tariffs, Developing Postal Services to Boost MSMEs E-Commerce Exports: Report

Trade, import and export for MSME: A digital central window to get goods through customs faster, online trade with countries that India has trade agreements with, recognize the “de minimis” limit (value below which no import duties or taxes are levied) for returns Raising products and reducing the burden of import duties on returned goods etc. can boost e-commerce exports, particularly for MSMEs, according to a report by MSME organization FISME and research firm IKDHVAJ Advisers on Tuesday.

In addition, the association also suggested that the state postal system, India Post, could partner with private logistics companies, adopt more IT-enabled services that leverage efficiencies of scale and aggregation to enable volume discounts, and work closely with other countries to improve the shipping platforms between to harmonize them They can also boost MSME e-commerce exports.

For example, India Post can work with the private sector to create interoperable tracking systems that can be used by both the public and private sectors. “Creating interoperable tracking systems would allow merchants and consumers to keep track of their packages throughout the shipping process and also improve the reliability of delivery,” says the report.

“Less than 1 percent of MSMEs are involved in exports as micro-enterprises make up 99 percent of the MSME universe registered on the Udyam portal. For these companies, exporting their small consignments through traditional channels is not only tedious, but also impossible. Exporting via the e-commerce route brings a bright ray of hope for millions,” said Anil Bhardwaj, Secretary General of FISME, in the report.

The study outlines concerns MSMEs face as e-commerce exports face high return rates due to customers not being able to pre-check the products. Returns are treated as imports and are subject to import duties, resulting in high logistics costs and product disposal. In addition, MSMEs lack digital skills and information on support tools, and there is no comprehensive guide to e-commerce export procedures.

To further reduce the cost of e-commerce exports, the report recommends a reduction in Export Data Processing and Monitoring System (EDPMS) fees, easier reconciliation of remittances for export earnings from abroad by a re-evaluation of the current 25 percent -Variation between exports and payments. Raising the 9-month limit for receiving payments for e-commerce exports, examining closed payment mechanisms with countries where India has introduced rupee payments.

“Given the current low level of exporter participation in e-commerce, a wider range of training opportunities to improve MSMEs’ capacities to participate more fully in e-commerce would expand the reach and scale of these exports. While such training is provided by the government and platform owners like Amazon, it needs to be implemented more broadly in each district by industry associations under the One Product, One District initiative,” the report continues.

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