Union Budget 2024 | Govt to set up e-commerce hubs to boost exports, 10-15 hubs to be set up initially

NEW DELHI: The government on Tuesday announced setting up of hubs to promote exports through e-commerce under public-private partnership (PPP) mode, with 10-15 hubs being set up initially.

Finance Minister Nirmala Sitharaman said these hubs will facilitate trade and export-related services under a seamless regulatory and logistical framework in a centralised manner.

“An e-commerce export hub will be set up under the PPP model to enable MSMEs and traditional artisans to sell their products in the international market,” she said.

Commenting on the announcement, Commerce and Industry Minister Piyush Goyal said these hubs will have facilities like speedy customs clearance and will be set up close to major cargo centres.

“We will start with 10 to 15 hubs to begin with and then gauge the interest from trade, companies and exporters. If we get good traction, we will scale it up. (These hubs) can be identified in consultation with the industry. The industry must go ahead,” the minister told reporters.

The Commerce Department is working on formulating a regulatory framework for these hubs, which is expected to be completed by September.

Currently, Indian exports through this channel are only around USD 5 billion (Rs 41,844.75 billion) per year, while China's are at USD 300 billion (Rs 25,108.05 billion) per year, and it has the potential to grow to USD 50-100 billion (Rs 4,1844.75 billion-Rs 8,369.015 billion) in the next few years.

Through these hubs, small-scale producers can easily sell to aggregators who then find markets for them. Exports that have great potential through this medium include jewellery, apparel, handicrafts and ODOP (One District One Product) goods.

Such hubs facilitate export customs clearance and also provide warehousing facilities, customs clearance, returns processing, labelling, testing and repackaging.

Ajay Sahai, general secretary of the Federation of Indian Export Organisations, had earlier said the facility would be a sort of bonded zone and would facilitate export and import of e-commerce goods and largely resolve the problem of re-importation, as around 25 per cent of goods in e-commerce are re-imported.

Last year, cross-border e-commerce trade was around USD 800 billion and is expected to reach USD 2 trillion (Rs 167,381.3 billion) by 2030.

According to a report by economic think tank GTRI, India's e-commerce exports could reach US$350 billion (Rs 29,291,727.5 billion) by 2030, but banking issues are hampering growth and increasing operational costs.

India has set a target of US$ 1 trillion (Rs 83,690.65 billion) in merchandise exports by 2030, and cross-border e-commerce is seen as one of the levers to achieve this goal.