Online exporters complain that govt’s plan to promote Indian ecommerce is inadequate; seek upgrade in the clauses

Indian online sellers who are eager to sell across the globe are in a fix due to the limited (and sometimes limiting) government policies. In 2015, the Foreign Trade Policy (FTP) for 2015 -20 made provisions for incentives to ecommerce traders who sold their products abroad. The government introduced two key schemes – the Merchandise Exports from India Scheme (MEIS) and the Services Exports from India Scheme (SEIS). The incentives (by way of duty credit scrips for importing goods) were to be given to companies that created jobs in the sectors where the government was looking to create jobs.

The incentives would apply for products below Rs. 25,000, primarily those made in India. The products included leather products, toys, books, handloom and ethnic garments. Any product above Rs. 25,000 would get incentives only worth Rs. 25,000.

‘There are too many limits now’, say sellers

It appears to sellers that the government isn’t doing enough to promote ecommerce. They feel that the government should bring costlier and fast moving items like beauty products and jewellery under the purview of the FTP. They also want the government to push the bar from Rs. 25,000 to Rs. 5 lakh. Apart from that, the MEIS clearance process is manual, creating more complications.The custom duty remains to be paid even in case of returned products only in ecommerce.

It might be simpler to sell abroad through marketplaces like Craftsvilla or Amazon than try to directly export.

What next?

The government ought to come up with helplines and support centres to simplify the process for online sellers. If the purpose is to encourage indigenous products, then it should conduct workshops and training classes for village artisans, as they are the target audience for the FTP. Perhaps a separate clause for other commerce and taking up the sellers’ suggestions on hiking the limit and their concerns on the ambiguous sections of the plan will help. It will go a long way in promoting Indian ecommerce and the ‘Make in India’ program abroad.