Study highlights B2C potential for the Indian enterprises.

An industry study estimates potential of US$26 billion for B2C e-commerce exports for retail exporters from the Indian Micro, Small and Medium Enterprises (MSMEs) sector.

The study, supported by eBay India, involves an in-depth survey on the major Micro, Small and Medium Enterprise (MSME) clusters across the country.

The study, ‘Exploring Potential of E-Commerce for Retail Exports of Indian MSMEs in Manufacturing Sector’,was prepared by the Federation of Indian Chambers of Commerce and Industry (FICCI), Indian Institute of Foreign Trade-Centre for MSME Studies and Apex Cluster Development Services.

Recognizing the immense potential of retail ecommerce exports from India, the report allows Indian MSMEs to explore prospects in B2C ecommerce retail export.

The survey brings forth limitations pertaining to ICT infrastructure; e-payment and logistics across MSME sectors.

It also highlights reasons like bandwidth and network restrictions, lack of availability of skilled workforce, privacy and security concerns and inaccessibility to finance amongst other reasons that are collectively dissuading Indian MSMEs from adopting modern retail practices.

The study highlights the need for the Government to recognise ecommerce retail exports as an industry and work towards removing regulatory barriers, including reviewing the FTP policy, simplifying customs duty procedures etc.

The study provides MSMEs with the requisite information to undertake ecommerce retail exports while exploring the untapped potential of the international B2C e-commerce market by leveraging the digital platform to bridge the gap between buyers and sellers. It also aims to intensify the global reach of Indian MSMEs and enhance the export competitiveness of ‘Made in India’ products.

However, this huge potential of e-commerce towards will only be feasible through modifications in the current Merchandise Exports from India Scheme (MEIS) policy under FTP 2015-20.

Sanjay Bhatia, President, FICCI-CMSME, stated, “There is no way we can undermine the contribution of MSMEs to our economy and it is in fact very important that we continue to explore synergies to integrate this very important sector with the latest emerging trends.

“E-commerce is one such trend which is massively changing the mechanism of global businesses. Online retail segment has seen tremendous growth globally over the past couple of decades. Even though this trend has caught up recently in India but the exponential growth has certainly been striking.”

He said that the e-Commerce spend in India still accounts for less than 2 per cent of the total retail spending (compared to 10-13 per cent in developed countries), nonetheless the segment has become a key driver to create new markets in erstwhile unreachable geographies.

The online international trade is flourishing and given the increasing accessibility to internet and the focus of the Government on Digital drive, our MSMEs can benefit directly from this opportunity. It is important that the Government recognised retail e-commerce exports as an industry.

Bhatia said that the study highlights the need for MSMEs to increase their presence in international market places using B2C exports as major tool.

The study covers in detail the status, missing opportunity by MSMEs and also suggests the policy changes required to make B2C ecommerce a smooth and attractive option for the exports by MSMEs. The suggestions are related to changes to be made in the existing system and need for new policy measures to adopt in areas of customs, DGFT, banks and ICT.

Commenting on the study, Rajveer Singh, MD, Apex Cluster Development Services Private Limited, said that there were infrastructural issues such as stronger ICT support in terms of speed and reliability of the network, power failure in rural areas and perception issues on technical complexities needs to be addressed in parallel to exploit full potential. fii-news.com