The Foreign Trade Policy (FTP) 2023, unveiled in April, gave special attention to the needs of the booming sector, but the government needs to do more to improve the ease of doing business, especially for tiny companies
The Foreign Trade Policy (FTP) 2023, unveiled in April, gave special attention to the needs of the booming sector, but the government needs to do more to improve the ease of doing business, especially for tiny companies
Amazon has shown the potential of India's e-commerce exports segment, especially from non-metros, and the company has doubled its 2025 exports target to $20 billion. It has said it will be able to help ship $8 billion in cumulative exports from India by the end of 2023, up 60% from $5 billion last year. Exports growth during a year in which global demand has been hobbled is good news – more so as it comes from small towns and tiny firms.
Amazon launched its Global Selling Programme in 2015 to help lower the entry barrier for small Indian businesses that find it difficult or unaffordable to expand their exports business using the conventional modes of sales and distribution. The company now has 125,000 Indian exporters from more than 25 cities and towns tapping into its global network. In 2022 more than 1,200 of these crossed ₹1 crore in exports.
Toys, ayurveda, home and kitchen products, and furniture are among the best-selling categories. The company says it expects to see many niche micro, small and medium enterprises (MSMEs) grow into global brands. There's a big market to be tapped for Make-In-India offerings: the handloom fabrics, handcrafted shoes, artisan jewellery and toys.
India must actively facilitate this development. It isn't just important for creating jobs and sustainable GDP growth but also for preserving India's art and heritage by unlocking new markets for these products. Eliminating middlemen and improving price discovery for artisans will help integrate these traditional products into global markets.
Recognising the promise of e-commerce exports, the Foreign Trade Policy (FTP) 2023, unveiled by the government in April, gave special attention to its specific needs. The policy declared four new towns of export excellence: Faridabad for apparels, Moradabad for handicrafts, Mirzapur for handmade carpets and daris, and Varanasi for handloom products and handicrafts.
But more is needed. For one, easing the value limit restrictions on exports through couriers could help. The FTP 2023 proposed to double the value limit for exports from ₹5 lakh to ₹10 lakh per consignment. This isn't good enough. The countries that these exporters typically face competition from do not have any limits at all. So, it would be better to do away with this. The limit especially restricts high-value consignments of gems and jewellery, handicrafts, handmade carpets and electronics.
Similarly, there's a need to review the framework of norms under which licences of authorised couriers are suspended pending investigation even when there's no wilful non-compliance with rules. Streamlining the archaic know-your-customer (KYC) management rules could also go a long way in freeing exporters and courier service providers from red-tape.
There's a need to shift the onus for KYC management to government authorities instead. The various government agencies involved in managing the Goods and Services Tax (GST) and other such interfaces are better placed to do this. It will also reduce compliance costs for exporters and courier companies.
Tax reforms also remain incomplete, hampering the ease of doing business, especially for tiny firms. Eliminating the need for separate GST registrations in each state is one reform that could drastically reduce compliance costs.
The Central Industrial Security Force (CISF) and the Indian Central Armed Police Force, under the Ministry of Home Affairs, has special training for staff deployed at airports, keeping passenger convenience top of mind. Similarly, staff in government agencies who interface with exporters and all other categories of business must be trained to help improve ease of doing business, expand exports, and shed the old 'Licence Raj' mentality that the bureaucracy still carries traces of