Digital push: Five-year FTP likely to include guidelines to promote e-comm among exporters

The five-year Foreign Trade Policy (FTP), to be announced on April 1, 2021, is likely to come up with guidelines on e-commerce for exporters to remove regulatory bottlenecks and encourage exporters to use the online platform for increasing business, an official has said.

“Through e-commerce, not only can existing exporters reach out to more buyers but producers selling in the domestic market too could explore the option of going global.

It can be an efficient platform to support the government’s ‘One District One Product’ initiative and also promote export of GI (Geographical Indications) products,” the official tracking the development told BusinessLine .

Addressing regulatory problems for overseas e-commerce transactions, including those related to third party payments and clearance of consignments, could be considered, the official said.

Payment received through OPGSP (Online Payment Gateway Service Providers) is not an authorised mechanism of receipt of exports payment, and thus, a tie-up with banks becomes necessary, pointed out Ajay Sahai, Director-General, Federation of Indian Export Organisations (FIEO).

“If the RBI adds them in the option of ‘manner of receipt of payment’ for exports, this issue can be addressed.

“This will not only reduce transaction cost for exporters but will give a huge fillip to e-commerce retail exports,” he said.

CBEC Zones

Suggestions made by exporters on the proposed setting up of Cross-border e-Commerce (CBEC) Zones comprising e-commerce market players, third-party payment agencies, logistics providers and other support services like credit insurance and banks, are also being looked at.

“All proposals are under discussion as the government is weighing all options to see what all could be incorporated in the policy. Inputs are being extensively taken from exporters. It may take at least 10 days more to give a final shape to the FTP and the guidelines on e-commerce for exporters,” the official said.

‘One District One Product’

E-commerce is being viewed as a good way of promoting the initiative of ‘One District One Product’ under which each district of the country is to be converted into an export hub by identifying products with export potential from that region and addressing bottlenecks, helping producers to scale up and enabling them to find potential buyers outside India.

Under the initial phase of the programme, 106 products have been identified from 103 districts across 27 States.

GI products

Facilitating producers of GI products (a tag used on items that originate from a specific geographic location and have special attributes) to use e-commerce to export their wares is also under consideration of the government, the official said.

GI products include items such as Darjeeling tea, Kashmiri Pashmina, Kangra paintings, Santiniketan leather goods, Bhagalpur silk and Blue Pottery of Jaipur.

As per UNCTAD estimates for 2018, the world market for e-commerce was $25.6 trillion. About 75,000 exporters from India sent out $1.2 billion worth of goods via the e-commerce channel during 2018-19, according to industry numbers.

The view that there is a huge scope for growth, for Indian e-commerce exports, is also supported by the fact that online exports are just a minuscule part of India’s total annual goods export of around $300 billion.

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