The report said the government should introduce a special loan package with fiscal incentives for the e-commerce export sector to enhance exporters' global competitiveness and offset cost obstacles.
 "EY-Assocham report recommends raising e-commerce export cap to $50,000")
Yash Kumar Singhal
India should raise the consignment limit for parcels exported through e-commerce channels to $50,000 (about Rs 41 lakh) from the current $12,000 (Rs 10 lakh), Ernst & Young (EY) and the Association of Indian Chambers of Commerce and Industry (Assocham) said in a report.
“With the rise in e-commerce business, this restriction is now insufficient. E-commerce exports above $12,000 are required to follow freight mode of transport, with increased scrutiny resulting in longer clearance and delivery times,” said the report, titled 'Facilitating e-commerce exports from India'.
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The report also advocates extending export promotion schemes to e-commerce exports and allowing courier companies to avail all export promotion incentives. It also urged state governments to formulate their own e-commerce export policies for each state, including identifying districts for setting up e-commerce export hubs (ECEHs), identifying products for which manufacturing clusters will be formed, expanding the reach of ECEHs by integrating training centres within ECEHs, promoting development of ECEHs in or near air cargo terminals and deploying customs officials there for clearance of export goods.
“Going forward, the government should seek to include cross-border e-commerce as a separate provision in all bilateral transactions with other countries to boost India's e-commerce exports,” the report added.
To enhance exporters' global competitiveness and offset cost obstacles, the report said, the Indian government should introduce a special financing package with fiscal incentives for the e-commerce exports sector. “Furthermore, access to cheaper financing should also be enabled by including e-commerce exports in the Reserve Bank of India's (RBI) priority sector financing category,” it added.
Current RBI guidelines mandate that sellers receive export proceeds in convertible foreign currency within nine months of export shipment. According to the report, this may not always be feasible for exports via e-commerce platforms under certain circumstances. “The above time limit should be either removed or flexibility should be provided by extending it up to 18 months for exports made through e-commerce mode as per the guidelines,” the report explained. Further, the report suggested redefining the responsibilities of sellers and e-commerce operators by allowing sellers to focus on producing goods for export and e-commerce operators to take full responsibility for regulatory compliance and payment reconciliation.
“Governments and other regulators need to take cues from other advanced e-commerce export markets and address gaps in current laws and processes to enable small and medium-sized enterprises to enter global markets efficiently and easily,” said Vipin Sapra, tax partner, EY India.
According to the report, India's share of the global e-commerce market, currently around 1.5 percent, is projected to remain below 2 percent in the foreseeable future.
According to the report, the global B2C e-commerce market is expected to grow from $5.7 trillion in 2022 to $8.1 trillion in 2026, at a compound annual growth rate (CAGR) of 9.1%. Meanwhile, India's B2C e-commerce market is valued at $83 billion and is expected to grow at a CAGR of 15.9% to reach $150 billion in 2026.
