Ecommerce drives economic surge with regulatory adaptation and regional cooperation
India is targeting USD 2 trillion in exports by 2030, equally divided into merchandise and services, said Union Commerce Minister Piyush Goyal in January. Fuelled by ecommerce and its role in driving economic development and expanding trade, the Asia–Pacific (APAC) region is projected to surge from a USD 2.9 trillion market value in 2022 to USD 6.146 trillion by 2030.
According to a United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) study, online purchases are estimated to account for about 19.4 per cent of total purchases in 2023. While speaking at the inaugural Asia Pacific ecommerce policy summit, experts stated that ecommerce exports are pivotal in enhancing the customer base and increasing the scale of small businesses in India.
Santosh Kumar Sarangi, Additional Secretary and Director General, Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry emphasised the need for a mindset shift amongst trade regulators to keep in mind the changing export landscape. MoUs with private players, such as Amazon and DHL, assist small enterprises in joining global value chains by providing comprehensive services.
Sarangi said, “Cross-border ecommerce exports offer a streamlined pathway to achieve India’s export potential and integration goals, crucially dependent on regulatory adaptation and infrastructure enhancement.”
Experts pitched for the enhancement of trade efficiency and streamlining cross-border transactions by implementing digital customs and logistics solutions, reducing barriers for exporters. Leverage ecommerce platform data to identify economic cooperation opportunities, guiding strategic partnerships and trade agreements through insights into consumer behaviour and market trends.
Mahendra Nerurkar, VP Payments for APAC MENA & LATAM, Amazon said “Customer trust and convenience are crucial in cross-border payments. UPI, for instance, has transformed money transfers by simplifying the entire process. Technology has made commerce and payments more accessible. It has bridged the gap between traditional complexities, making commerce and payments more accessible. Many Amazon customers, for example, prefer the convenient prepaid wallet options.”
Several reports stated the utilisation of major ecommerce platforms for consumer protection, implementing policies for returns, redress and data security to foster consumer trust. Allow cross-border ecommerce payments up to a set maximum per consumer. Reserve a portion for intra-regional purchases to foster regional trade integration.
By adopting these recommendations, stakeholders can effectively establish and leverage online channels for traditional exports, fostering growth and innovation in the global marketplace.
Deepak Mishra, Director and CE, ICRIER said, “Despite being the largest and fastest-growing region for e-commerce, the Asia Pacific (APAC) region lacked a structured policy forum to discuss, debate and disseminate ideas and experience involving the sector.”
Experts noted that there are ample opportunities for eccommerce growth, however, regional policy cooperation is essential to assist MSMEs in integrating into global value chains and promoting economic inclusivity.
While the share of micro, small and medium enterprises (MSMEs) in the manufacturing sector has remained fairly constant, their contribution to overall exports has declined despite the recovery in FY22, according to a joint report by U GRO Capital and Dun and Bradstreet (D&B).
Notably, following the pandemic, the contribution of MSMEs to India’s gross value added (GVA) decreased as India’s overall growth declined. The noteworthy increase in the contribution of MSMEs to GVA from FY21 to FY22 signifies a substantial rebound for these businesses from the pandemic, it added.
The report, however, stated that MSMEs are all set to gain from 7 per cent projected growth for FY24 and they are likely to make more capex and hire more people amid the ongoing geopolitical crisis across the globe.
