exports: How e-commerce can play a big role in boosting exports from India – The Economic Times

At present, exports contribute to about 20% of India’s GDP. However, considering the size of our economy, our manufacturing prowess, the growing share of MSME (Micro Small and Medium Enterprises) contribution to the economy, increased internet penetration and rapid pace of technology adoption – exports can play a critical role in economic revival post COVID-19. What is critical is to use technology and lower the entry barrier for millions of MSMEs across India to participate in export opportunities.

MSMEs contribute to over a third of the GDP of India while accounting for half of the country’s exports. They generate employment opportunities and currently employ almost 110 million people across the country, which is why they are aptly regarded as the backbone of the Indian economy. A laser sharp focus on empowering Indian MSMEs to leverage e-commerce and drive Indian exports can help us address the Prime Minister’s vision of ‘Atmanirbhar Bharat’ and support the rise of global D2C brands from India. MSMEs can benefit greatly from the opportunities that global trade offers. However, entry barriers like market access, navigating the complexities of cross border logistics and payments, large initial investments and an uncertainty of demand deters these businesses from realising their full potential.

This is where e-commerce exports can benefit Indian MSMEs. E-commerce exports enable businesses to sell directly to customers across the world. It helps businesses transcend boundaries and get access to a much larger pool of customers. It also provides an ‘easy to adopt and scale’ mechanism for MSMEs to grow their business outside India, without having any footprint locally in international markets and reducing dependence on intermediaries – bringing the ‘seller’ closer to the ‘customer’. As recently as 8 years ago, if an Indian MSME wanted to set up an exports business, they had to visit global trade fairs, book orders, figure out logistics and shipping and then wait for the payments to come in. Now all of this is achieved seamlessly, thanks to e-commerce. Businesses are able to go online by either setting up their own ecommerce presence or signing up with a marketplace like Amazon and start selling to customers across the world.

E-commerce creates a level playing field for any kind of business to access global markets. It dispels the notion that exports are meant for larger businesses that can make massive investments to take their operations overseas.

The rising popularity of ‘Made in India’ products has also given rise to innovative customer use cases for products. This includes customers replacing creamers in coffee with ghee or using printed bedsheets as beach throws. Indian products across categories are witnessing great demand in global markets, from traditional categories like textiles, herbal products, teas to newer sectors like toys, home and kitchen products and a lot more. Thousands of Indian MSMEs are already benefiting from this demand, helping them create a niche for themselves. Importantly, these businesses have a positive impact downstream on job creation and the economy overall.

The role that technology has played in transforming how business is done in the past 18 months has led to our optimism about the opportunity that e-commerce exports offer Indian businesses. With e-commerce exports, Indian businesses have an avenue to create an international identity for world-class products manufactured locally.

We believe that e-commerce can play a big role in making exports easy and accessible for lakhs of MSMEs across India and take the local innovation and expertise global.

(The writer is Director, Global Trade at Amazon India)

(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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