New Delhi: India's e-commerce export, currently valued at $1 billion annually, is likely to increase to $400 billion over the next six to seven years, directorate general of foreign trade's (DGFT) chief Santosh Kumar Sarangi said on Friday.
Speaking at a conference by industry body FICCI, Sarangi said the estimated growth in e-commerce exports will help the country achieve $2 trillion worth of goods and services exports by 2030.
He said global cross-border e-commerce, currently valued about $800 billion annually, is estimated to reach $2 trillion by 2030.
While India's total merchandise exports are currently at about $450 billion annually, China's e-commerce exports alone stood at $300 billion annually, Sarangi said.
"It shows the potential this sector holds for a country like India where product diversity and innovation is immense, and the ability of our entrepreneurs to gauge the requirements of specific markets and customise their products to cater to these markets is also huge," Sarangi said.
However, a huge mindset change and several policy changes will be required for India to achieve its potential in reaching the e-commerce export targets, he said.
"The entire orientation for the export ecosystem was modelled on a B2B shipment of goods through air, and ships, which needs to change (to cater to e-commerce exporters)," he added.
India's merchandise trade deficit widened to a record in October due to a sharp rise in gold imports during the festive season and a higher oil bill even as exports reported an annual rise during the month.
The trade deficit widened to $31.46 billion last month, with imports at $65.03 billion and exports at $33.57 billion, according to data from the ministry of commerce and industry.
Indian exports have been impacted by a slowdown in global growth, especially in the advanced economies of the West. These countries are also seeing tightening of interest rates due to nagging inflation, leading to a slowdown in business and trade. Meanwhile, conflicts in Ukraine and Israel have push oil prices higher, leading to greater inflationary pressures.
Talking about steps taken by the DGFT to promote exports through e-commerce, Sarangi said the agency is working with stakeholders, including e-commerce players, various government departments, the Reserve Bank of India (RBI) and others to smoothen out various issues faced by the sector.
"We (DGFT) are working with the RBI, and Indian banking association to streamline the process of export credit availability," Sarangi said. “In course of time we expect the fintech sector to play a key role in providing innovative and cost effective payment solutions."
The central government is expected to soon unveil a comprehensive e-commerce policy, which will defy the e-commerce landscape in the country.
The policy and rules have been framed after thorough consultation with all stakeholders, commerce minister Piyush Goyal recently said in an official statement.
Meanwhile, Sarangi said e-commerce stakeholders have asked the department for the promotion of industry and internal trade (DPIIT) to relook at the FDI policy on inventory-based model of online trade and exports.
Currently, while India's FDI policy does not permit foreign direct investment in the inventory-based model of e-commerce, it allows FDI for firms operating through a marketplace model.
Talking of various steps taken by the government to promote e-commerce exports, Sarangi said DGFT is working with relevant stakeholders on various issues like exploring a 'composition levy scheme' for smaller e-commerce players to waive off mandatory GST till they attain a certain scale in exports, working with the RBI and Indian banking association to streamline the process of export credit availability, and striking off payment receivables on returned goods.
He said that the DGFT is working with the Department of Post to ensure that Dak Niryat Kendras and foreign post offices (FPOs) get strengthened and expanded.
DGFT is also working with the postal services of the US and other countries to provide a full online tracking mechanism for the e-commerce export consignments, he added.