The Commerce Department is working on the policy that could detail ways to reduce the compliance burden for small exporters and finance MSMEs to increase exports. It may also seek to correctly categorize products that are currently classified as “others”, as this system leads to misclassifications and tax evasion, thus aggravating the growing trade deficit.
“We are working on ways to facilitate e-commerce exports through the policy,” an official said, adding that the policy could be in place by the end of next month.
Attention will likely be given to MSME exports as well as developing districts as export hubs. The policy comes as Indian export growth slows. Goods exports rose 2.14% from a year earlier to $36.27 billion in July, even as the trade deficit nearly tripled to $30 billion.
In fiscal year 2022, India’s outbound shipments reached a record $421.8 billion. The government aims to raise the value to $1 trillion by 2030.
The Department of Commerce consults with stakeholders to integrate global markets through bilateral trade agreements, government-to-government commitments, and using the World Trade Organization’s multilateral agreements. Product and country strategies are also being discussed to diversify India’s export products.
Exporters have called for a separate e-commerce chapter in the policy which would include all export benefits available to the sector which should be on par with conventional exports.
“We suggested creating an integrated park for cross-border e-commerce,” said Ajay Sahai, chief executive of the Federation of Indian Export Organizations.
These parks are expected to provide comprehensive facilities such as banks, fintech companies, foreign post offices, courier terminals, logistics companies, warehouses, customs, tax refunds – all under one same roof. In addition, space can be reserved for packaging and small operations.