E-commerce Exports Can Propel MSMEs to New Heights

After the PM’s visit to the USA, Amazon has announced that it will take its investments in India to USD 26 billion by 2030 through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments.

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During Prime Minister Narendra Modi’s recent visit to the USA, he met with many American CEOs Tesla’s Elon Musk, Amazon’s Andy Jassy, Apple’s Tim Cook, Google’s Sundar Pichai, Boeing’s David L Calhoun, etc. Many of these companies announced new investments, new initiatives, and partnerships into India.

After the PM’s visit to the USA, Amazon has announced that it will take its investments in India to USD 26 billion by 2030 through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments. Google’s CEO Sundar Pichai mentioned that Google is planning on investing USD 10 billion in India’s digitisation fund.

Across the world, June 27th is earmarked to celebrate MSMEs and their immense contribution to the economy. The MSME sector of India contributes around 33% of India’s total GDP and is predicted to contribute worth USD 1 trillion to India’s total exports by 2030. In the Budget 2023- 24, the Ministry of Micro, Small and Medium Enterprises provided many facilities including extension of credit schemes, reduction in tariffs and duties on imports and exports to make it more affordable for MSMEs to participate in international trade among others. Under the Foreign Trade Policy 2023, MSMEs will receive various incentives and support to enhance their exports. One of the key benefits is the reduction of compliance costs for exporters. The policy will simplify the export procedures and reduce the time taken for clearance, which will help MSMEs save costs and improve their competitiveness. The key approach to the FTP policy is based on these 4 pillars:

  • Incentive to Remission,
  • Export promotion through collaboration – Exporters, States, Districts, Indian Missions,
  • Ease of doing business, reduction in transaction cost and e-initiatives and
  • Emerging Areas – E-Commerce, developing districts as export hubs and streamlining SCOMET

Global Export Opportunity

  • According to UNCTAD, the global B2C e-commerce market was about USD 5 trillion in Of this, B2C e-commerce international trade is about 9% and is growing each year.
  • Key factors of cross-border trade, a global phenomenon:
  • Lowered entry barriers for
  • Customers seeking diverse products outside home
  • Advanced technologies offered by e-commerce export
  • Indian Government initiatives:
  • Entitlement of e-commerce in Foreign Trade Policy
  • Foreign Trade Agreements
  • Dedicated portal for MSME exporters
  • Districts as export hubs
  • DGFT e-platform

Indian Exports

  • India’s overall exports are projected to scale new heights, growing at 84% during FY2022- 23 to achieve USD 770.18 billion worth of exports.
  • Merchandise exports have registered the highest ever annual exports of USD 447.46 billion with 6.03% growth during FY2022-23 surpassing the previous year (FY2021-22) record exports of USD 00 billion.
  • Services exports lead the overall exports growth and are projected to set a record annual value of USD 72 billion with growth rate at 26.79% during FY 2022-23.
  • India’s Ministry of Commerce and Industry believes that an export target of USD 2 trillion is set to be achieved by
  • Achieving a USD 5 trillion economy requires about USD 1 trillion in merchandise exports, a large rise from current
  • NASSCOM has estimated that the share of current online-led exports in total exports from India is likely to increase 45 times by

E-commerce Exports

Indian exporters, largely MSMEs, must grab the opportunity when the global buyers are looking up to India to execute their China plus one strategy and de-risking their China reliance. To this effort, global ecommerce platforms like Amazon and Walmart/Flipkart can be allies of Indian exporters.

Amazon India’s Global Selling Programme

  • Targets to enable USD 20 billion in cumulative exports by
  • Top export categories are:
  •  Apparel
  •  Toys
  •  Jewellery
  • Home
  • The cumulative exports by Indian exporters on the Amazon Global Selling programme are expected to cross USD 5
  • Amazon has doubled its exports pledge, to now enable USD 20 billion in cumulative exports from India by
  • It estimates USD 125 billion worth of Indian exports being driven by e-commerce by
  • It has 100,000+ Indian exporters selling through Amazon Global

Walmart/Flipkart E-commerce Exports

  • Along with Flipkart and cross-border commerce company Payoneer, Walmart laid out a detailed roadmap for local sellers with export ambitions at the recent Walmart Global Seller
  • The roadmap is part of Walmart efforts to expand its sourcing from India to USD 10 billion a year by

Open Network for Digital Commerce (ONDC)

  • ONDC is a network based on open protocol and will enable local commerce across various segments, such as mobility, food order, hotel booking and travel, among others, to be discovered and engaged by any network-enabled It aims to create new opportunities, curb digital monopolies, support MSMEs and small traders and help them get on online platforms.
  • It is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and
  • Though ONDC is being used for local e-commerce to compete against Amazon and Flipkart, it can be foreseen that ONDC may soon facilitate global

For Exports, MSMEs can Leverage Amazon and Walmart/Flipkart

  • Given the global export potential and the impetus provided by the Indian government by FTP 2023, MSMEs should look towards global
  • The increased accessibility to e-commerce has enabled MSMEs to actively participate in foreign markets and deepen their global
  • MSMEs should grab this opportunity and use Amazon and Walmart/Flipkart as a trusted partners to
  • MSMEs are already exporting around USD 2 billion using the Amazon Global Selling Programme, and Walmart/Flipkart has exports of over USD 3 billion.

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