The RBI has assured the commerce ministry that it will review the Foreign Exchange Management Act (FEMA) guidelines with a view to easing the operations of e-commerce merchants based on the information received from it and will address the issue soon.
“DGFT officials have elaborated to the RBI the need to relax guidelines for e-commerce exporters, including giving time to realize payments on B2B shipments.Based on this recommendation, the central bank has “We are reconsidering the issue and will return to the matter soon,” the official said. business line.
The Directorate General of Foreign Trade's approach to the Reserve Bank of India to relax FEMA guidelines on e-commerce is in line with the larger policy direction of increasing exports through e-commerce.
270 day limit
“In the case of exports through e-commerce, it is important that the RBI relaxes the 270-day cap on foreign currency conversion (prescribed for regular B2B transactions). E-commerce operates in a slightly different ecosystem; This is because we need more time,” the official said.
For example, if an e-commerce player does not export directly to consumers, but instead sends goods to an external warehouse and sells them later, say after a year, it will take that much more time to realize foreign exchange. It will be. An official explained. “We hope the RBI will understand the merits of the discussion and provide flexibility accordingly,” the official added.
RBI is also working with DGFT to allow e-BRC (Electronic Banking Realization Certificate) on a self-declaration basis to e-commerce operators, especially those dealing in large volumes of small orders. Currently, the bank has to upload the e-BRC to his DGFT system during export payments, which is a time-consuming process.
India's e-commerce exports are estimated to be around $2 billion annually, a small amount compared to the country's total merchandise exports of more than $450 billion, but with significant growth potential.
Advantages of FRP
FTP 2023, announced last year, includes a number of measures to promote e-commerce exports, among them the extension of all FTP benefits to e-commerce, monetary limits on exports through courier services These included the establishment of guidelines to streamline e-commerce export facilitation.
The policy also stated that e-commerce aggregators will notify designated hubs with warehousing facilities to facilitate inventory, customs clearance and return processing. Processing facilities will be permitted for last-mile activities such as labeling, testing, and repackaging.
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