At a time when global trade wars are raging high, the Ministry of Commerce and Industry has started consultations with a wide range of eCommerce stakeholders, including Amazon, Walmart-owned Flipkart, mid-segment retailers, and top Indian exporters in the small-scale manufacturing segment, to explore viable strategies to strengthen exports from India. The initiative comes after the Trump administration imposed 50% tariffs on Indian exporters across key verticals like textiles, handicrafts, and other small-scale products.
The DPIIT (Department for Promotion of Industry and Internal Trade) has already held the first round of discussions with stakeholders. A second session has been scheduled for the upcoming week.
The Ministry discussed possible alternatives like the e-commerce Export Hubs (ECEHs), which was announced in the Union Budget. The authorities are also exploring ways to help MSMEs access global markets efficiently.
Debate over Inventory-Based Model
Presently, stakeholders in the industry remain divided over the inventory-based model of online commerce.
- MSMEs’ position: They want FDI in the inventory-based model, arguing it could reduce compliance burdens and make exporting easier.
- Retailers’ view: Many oppose allowing FDI, citing operational challenges and competitive concerns.
100% FDI is now allowed only in the marketplace model. In this model, eCommerce platforms serve as intermediaries as they connect sellers to buyers. In contrast, the inventory-based model allows companies to hold stock and sell directly to consumers. MSMEs argue that this model would streamline exporting amid tariffs.
India’s e-commerce exports are mainly driven by small businesses offering products valued between $25 and $1,000, including:
- Handicrafts and artwork
- Ready-made garments and books
- Gems and jewellery
Export Potential and Policy Recommendations
According to the Global Trade Research Institute (GTRI):
- Current e-commerce exports stand at around $5 billion, far below China’s $300 billion
- According to estimates, these exports can reach $350 billion by 2030
- Presently, the existing rules that were formulated for traditional B2B exporters are posing compliance hurdles
GTRI recommends a dedicated e-commerce export policy, similar to frameworks in China, Korea, Japan, and Vietnam, to help small firms sell globally.
With these consultations, the government seeks to align policy with industry needs, helping MSMEs, mid-segment retailers, and top Indian exporters grow exports while managing compliance efficiently.
Attribution:
Source: Based on information originally reported by The Indian Express on 28 August, 2025
Leave a Reply