Manufacturing by small units, cottage units, and MSMEs is a significant contributor to India’s growth storey. MSMEs are sustainable and effective; the need of the hour is not only improved automation in the manufacturing process for greater input efficiencies, but also more outlets for entering wider markets and opportunities to become a part of national and global supply chains.
Today, e-commerce marketplaces are the best potential enablers for this transition at the lowest possible expense, innovation, and investment. China dominated the global market by using the conventional system of allowing guilds and business centres to conduct transactions through a single-window approach. However, the world has changed. Now, the only way to perform effectively in existing supply chains is to invest in digital transformation and new technology.
The e-commerce sector offers opportunities for MSMEs to partner in supply and delivery networks by investing in supply chains. Start-ups and emerging brands are also seizing opportunities to create national and even global brands. Many offline stores are now embracing e-commerce in order to capitalise on these opportunities, and both conventional and new retail models are embracing more offline and online partnerships.
Today, the main differentiator is digital empowerment. Without it, our SMEs would be unprepared for the future. India has set the target of achieving inclusive growth and improving livelihoods. The Prime Minister has used the slogan “vocal for local” and has spoken about his vision of Atmanirbhar Bharat many times. It will play a major role in achieving this vision. It enables goods from the hinterlands to enter the national market.
However, there are several roadblocks to developing a solid e-commerce market that must be resolved. First, discuss the impediments to doing business online that the e-commerce industry faces. Since they must “compulsorily register” even if their turnover is poor, sellers on e-commerce marketplaces do not benefit from the GST threshold exemption (of Rs 40 lakh) for intrastate supplies that offline sellers do.
The government provides MSMEs with assistance in understanding how e-commerce works. The government should work with e-commerce companies to exploit their expertise and scale to establish special onboarding initiatives, conduct a series of awareness sessions, and provide basic but essential services such as imaging and cataloguing, and so on. State governments should have these.
Physical and digital infrastructure is also needed for digital transformation. The road and telecommunications networks will not only boost customer access but will also allow sellers from remote areas to reach the larger national market as well as the export market. E-commerce platforms’ robust logistic network and warehouse chains allow similar access and scope. The National Logistics Policy should prioritise the needs of the e-commerce market.
The government is taking unique measures to increase exports through e-commerce. Identify goods with export potential, connect e-commerce to export-oriented manufacturing clusters, promote cooperation with sector-specific export promotion councils, and exploit existing SEZs to establish e-commerce export zones.
The upcoming Foreign Trade Policy must be completely utilised. Specific policy provisions that provide incentives for e-commerce exports raise awareness and allow end-to-end digitisation for e-commerce exports are crucial in order to provide Indian e-commerce exporters with the competitive advantage they need to succeed in global markets. The Foreign Trade Policy should recognise these areas and include e-commerce export-specific provisions in the revised policy, which takes effect in April of this year.
