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Boosting India's E-commerce Exports: Regulatory Challenges & Solutions

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By Rediff Money Desk, New Delhi   Jan 31, 2025 17:05

Economic Survey highlights the need for addressing regulatory hurdles to drive India's e-commerce exports. Learn about key challenges and potential solutions.
Boosting India's E-commerce Exports: Regulatory Challenges & Solutions
New Delhi, Jan 31 (PTI) The Economic Survey on Friday called for addressing regulatory and compliance obligations to promote the country's exports through the e-commerce medium.

It said India's e-commerce exports hold immense potential to grow significantly and become a key contributor to the country's GDP.

"The e-commerce export ecosystem in India presents opportunities for growth alongside a few challenges related to regulatory frameworks and compliance obligations," the survey said.

Citing an example, it said the roles of sellers and e-commerce platform operators are not yet clearly defined.

"This requires collaboration between sellers and e-commerce operators at various stages of export and payment processes," it added.

It also said that customers are increasingly preferring customised products from skilled artisans, and India can leverage its rich tradition of handcrafted items to meet this demand.

"Expanding data connectivity, increased penetration of smartphones, a rise in availability and use of digital wallets and safer online payments, increased customers' income levels and growing familiarity with digital shopping platforms have provided an impetus to India's e-commerce exports," it said.

According to a report, the global B2C (business to consumer) e-commerce market is expected to grow from USD 5.7 trillion in 2022 to USD 8.1 trillion by 2026.

India's B2C e-commerce market was worth USD 83 billion in 2022, and it is anticipated to grow to USD 150 billion by 2026, showing a CAGR of 15.9 per cent.

However, by current market size, India's e-commerce market makes up a small fraction, about 1.5 per cent of the global market, and it is projected to stay around 2 per cent in the coming years.

The survey said that the government's E-Commerce Export Hub (ECEH) initiative aims to revolutionise the country's cross-border e-commerce.

These hubs connect SMEs, artisans, and One District One Product (ODOP) producers to global markets, boosting logistics efficiency and economic inclusion in Tier 2 and Tier 3 cities.

On foreign direct investments (FDI), the survey said despite the short-term volatility in global markets, triggered by factors such as inflationary pressures, rising interest rates in developed economies, and geopolitical tensions, the long-term outlook for FDI in India remains favourable.

"India remains a strong destination for FDI, ranking high in greenfield project announcements and international project finance deals. However, the country has to pay heed to numbers," it added.

As per the data published by RBI, net FDI to India during the first eight months of FY25 stood at USD 0.48 billion compared to USD 8.5 billion in the corresponding period of FY24.

Commenting on the survey, Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas & Co, said that the government should also focus on expediting the development and expansion of industrial parks to promote investments.

"Lastly, to keep up with the pace of the technology market in the world, India needs to step up in terms of increased budget allocation, tax incentives and favourable policies for developing technology infrastructure and promoting further technology advancement in spheres of artificial intelligence, IoT (Internet of Things) etc., which will boost FDI in the technology sector," Pandey said.

Debjani Aich, Partner at IndusLaw, said the four labour codes have been pending for over four years, and there is an expectation that the codes should be implemented at the earliest because that is what actually labour reform is going to be about.
Source: PTI
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