fisme: Green channel, easy customs, SOP for returns: FISME-IKDHVAJ report on e-commerce

The Federation of Indian Micro and Small & Medium Enterprises (FISME) has suggested a green channel for e-commerce exports with easier documentation and tripartite awareness raising campaign, simplified customs processes and standard operating practice for product returns to promote India’s exports through e-commerce.

In a report it released with Delhi-based research and advisory firm IKDHVAJ Advisers LLP on Tuesday, FISME also stressed on a strategy for e-commerce exports focussing on MSMEs spread across the nation to sell their products to global markets as above 90% of e-commerce exporters in India are MSMEs, most of them micro and small enterprises.

“E-commerce exporters and within them particularly the MSMEs, face two types of concerns, those faced by conventional or offline exporters and others only by online exporters,” they said in a report titled ‘Expanding India’s E-Commerce Exports: Focus on SMEs’.

Shorter delivery time for e-commerce exports than conventional offline exports, higher extent of returns, returns being treated as imports due to problems in identifying the returned product as the originally exported product and being subject to full import duties leading to high logistics costs, and absence of single information source that provides a comprehensive and consistent list of all procedures/forms required for e-commerce exports, are some or the challenges faced by e-commerce exports, according to the report.

The two have suggested special facilitative mechanisms on cross-border payments especially with respect to closure procedure at banks besides lowering charges for Export Data Processing and Monitoring System.

“Exploring closed loop payment mechanisms with countries with which India has initiated rupee payments,” FISME and IKDHVAJ Advisers LLP said.

Easier reconciliation of remittances for export receipts from abroad through a reassessment of the current 25% variation between exports and payments, and raising the 9-month limit on receiving payments for exports for e-commerce, are the other recommendations.