The thrust to cross border e-commerce: FTP 2023

Foreign Trade Policy (FTP) 2023 has highlighted measures to extend benefits to e-commerce exports, identifying it as a key thrust sector. The new age policy targets to attain around US$ 200-300 billion in e-commerce exports by 2030, and will soon frame guidelines on the topic.

A wide range of outreach and training activities will be taken up to enhance the capacity of artisans, weavers, garment manufacturers, gems, and jewelry designers with a motive to onboard them on e-commerce platforms and promote higher exports.

e commerce

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On 31st March, 2023, the Indian Government unveiled the new Foreign Trade Policy after a long wait of two years. This dynamic and responsive policy covered major potential sectors in order to bring in benefits across all poles. It included measures for ease of doing business like e-certificate of origin, online approvals, paperless filing, facilitating exports through e-commerce, overall reduction in transaction costs, and promoting manufacturing. Apart from this, the policy has thrown light on developing districts as export hubs, which is again one of the major government focuses of the present times.

E-commerce exports have grabbed significant focus in this FTP. A plethora of measures has been implemented to benefit e-commerce exports as well as by extending all FTP benefits. The aim is to highlight the potential of the sector and target the e-commerce exports of $200-300 billion by 2030 from $5-10 billion at present. In simple terms, it means that e-commerce exporters will be eligible for the same benefits as traditional exporters.

Additionally, FTP 2023 increased the value limit for exports through courier service from Rs. 5 lakh to Rs. 10 lakh per consignment. It also highlighted that essential enablement of IT systems in the Department of Commerce, Post, and CBIC will be completed in six months to empower exports.

The government has also proposed to set up designated export hubs with a warehousing facility to help e-commerce aggregators for smooth stocking, customs clearance, and returns processing. The processing facility will help in many other activities like labeling, testing, and repackaging.

Future Growth Potential 

The e-commerce sector has risen with much greater importance over the last few years, especially after the pandemic. With the support of policies implemented by the government, exporters are now able to easily sell their products directly to customers abroad.

According to a report by Zion Research, global cross-border e-commerce reached US$ 562.1 billion in 2018 and is expected to reach over US$ 4 trillion by 2027 – increasing at a CAGR of 27.4%. A recent study of apparel shoppers across 11 countries revealed that over two-thirds (67%) of them had purchased something from abroad in the last 12 months. Even 1% market share comes to US$ 40 billion in exports for India.

Moreover, there are several established platforms in the market today like Flipkart and Amazon, which constantly work on enhancing their programs to support exports from artisans, weavers, and craftsmen. Programs like Flipkart’s ‘Samarth’ and Amazon’s ‘Global Selling Program from India’ have played a significant role in improving the overall situation of the sector. More than 100,000 Indian exporters are now selling across the globe through Amazon’s Global Selling Program. These exporters are presenting over 140 million Made in India products to Amazon customers in more than 200 countries and territories globally.

In addition to this, initiatives like ONDC (Open Network for Digital Commerce) have opened new routes allowing more players to enter e-commerce infrastructure. This has motivated small or micro exporters to reach international customers without investing in a physical set-up.

Country branding has to be the first step, rather than individual firms getting in and doing their branding. This is going to be a huge task. We may definitely have individual success stories. But those are exceptions and the effort should be on country branding, because most of our export basket belongs to small and medium enterprises. One suggestion is the government initiative to organize more e-fairs, which allow the products to be showcased on a three dimensional plane.

Most developing countries have started doing this and the gems and jewellery sector has already had success by participating in these online E-fairs. This should take precedence before individual firm level branding. The government should strive to create a kind of brand equity among buyers, which platforms like Amazon have successfully done. Decentralization can also help accelerate this process.

State governments are willing to incentivize facilitation centers to be set up in their states. As long as these facilitation centers are decentralized and dispersed in terms of ownership, it won’t be a problem. If the big players are going to grab these opportunities, then probably the platform will dictate the transaction rather than the importers and exporters having a fair play in it.

The free return policy is in place in the domestic import-export market, but when it comes to foreign transactions, there is no clarity or proper definition for return policies. If an international customer wants to return the product, what should be done? What will be the cost to bring it back and who will bear it? There is still a lot of conditionality with which the return policies are defined. The moment these loose ends are tied up, we’ll find accelerating growth. That is one of the positives of India.

Another area of concern is the compliance certification. The parties who are participating in e-commerce exports should be comfortable in understanding e-transactions, e-payment, e-signatures, e-shipping and other digital solutions. This can affect cost competitiveness, when business owners are looking at people to educate them about these factors. As far as compliance in the importing destination is concerned, whether it is in physical form or electronic form, the cost of compliance will remain the same.

However, there are considerable hurdles to overcome. For instance, the regulatory framework has to be improved upon. Dr K. Rangarajan, Professor and Head, Center for MSME Studies, IIFT Kolkata, commented to IBT earlier, “When multimodal transportation comes into play, the level of integration in India is not satisfactory. It is not possible to travel with a single logistics document, which is accepted by every authority, inside or outside of India.” Furthermore, lack of clarity on return policies, as well as awareness and comfort with e-transactions are critical areas to address. However, he expressed confidence on the future, stating:

“The unprecedented growth of digital e-commerce in the domestic market is proof that once there is a certain level of confidence and certainty, there will be no stopping Indian entrepreneurs from entering global markets.”

In view of the FTP, the government may soon frame guidelines in consultation with all stakeholders to facilitate exports through e-commerce. “An inter-ministerial committee comprising officials from the Department of Revenue, Post, and DGFT are working on guidelines to facilitate further exports under e-commerce,” according to Santosh Sarangi, Director-General of Foreign Trade.

Moreover, a wide range of outreach and training activities will be taken up to enhance the capacity of artisans, weavers, garment manufacturers, gems, and jewelry designers with a motive to onboard them on e-commerce platforms and promote higher exports.


  1. Focus on e-Commerce is welcome initiative for MSMEs, even IMF also highlighted the Digital India Initiative.

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