Govt calls meeting to discuss plan for inventory-based e-comm exports

MUMBAI: In its bid to push e-commerce exports and open up the global market for scores of small and medium sellers, the govt is set to begin consultations with the industry to draw a framework for allowing inventory based model for e-commerce exports.

While there have been growing calls from the industry to open up the inventory model for e-commerce exports, the progress on the talks comes at a time when the US has scrapped a provision that allowed tax free import of small packages worth up to $800, hurting growth prospects for small sellers.

The proposal, if implemented, will make a deviation from govt's current FDI norms that bar foreign e-commerce marketplaces such as Amazon and Walmart's Flipkart from holding inventory, probably explaining New Delhi's urgency to boost export growth.

Although it has been in the pipeline for more than a year, the move coincides with signals that the India-US trade talks may resume soon.

The meeting called by Directorate General of Foreign Trade (DGFT) on Sept 15 is expected to be attended by Amazon and Walmart besides representatives from logistics companies and other govt departments, note of the meeting agenda gathered from sources showed.

At present, less than 10% of local MSMEs selling online participate in global e-commerce exports constrained by a host of factors including complex documentation, compliance requirements and high logistics costs.

Studies indicate that nearly 87% of enterprises onboarded for e-commerce exports during 2020-24 exited by 2025. "The proposal envisages a third-party export facilitation model, wherein a dedicated export entity linked to e-commerce platforms would manage compliance, logistics, and customs processes. This would enable MSMEs to focus on product development, quality, and branding," said an agenda note shared by DGFT, which has been reviewed by TOI. Allowing the move may require updates to DPIIT's FDI guidelines, including review of the prohibition on inventory based e-comm for export-only models, the note said.