DGFT, Private Players Partnership Crucial For Export Hubs' Success: Experts

Speaking at the Forum for Internet Retailers, Sellers and Traders (First India) event,  stakeholders from the Directorate General of Foreign Trade (DGFT) emphasised the need to establish over 100 export hubs to tackle key challenges faced by Indian micro, small and medium enterprises (MSMEs) in international trade. 

The discussion highlighted cross-border payment issues, complex customs procedures, and restrictive export policies as major barriers to global expansion. They noted that fast-tracking the establishment of ecommerce export hubs (ECEHs) would support the global ambitions of Indian MSMEs by streamlining processes and enabling sellers to navigate international markets more efficiently.

Experts said there is a need to establish 100 export hubs and contribute to the country’s larger objective of USD 1 trillion in overall exports. Currently, commerce exports amount to just USD 4 to 5 billion, representing a mere 0.9 to 1.1 per cent of India’s total merchandise exports in FY23. To meet the government’s target of USD 200 to 300 billion in ecommerce exports, participants emphasised the need to multiply current export levels by 50 to 60 times.

“Initiatives such as the Trade Connect Portal and Exim Pathshala are designed to empower and educate stakeholders across the spectrum. We invite leading industry players to collaborate with us in developing educational content on critical topics, including logistics, warehousing, packaging and labelling, to extend the nationwide outreach and create a meaningful impact,” said Moin Afaque, Joint Directorate General of Foreign Trade (DGFT).

Notably, DGFT has been collaborating with platforms like Amazon and DHL to boost MSME exports through the "District as Export Hubs" initiative. In recent months, DGFT signed MoUs with DHL to train MSMEs across 76 districts and with Amazon to provide export training in 20 districts. Logistics firm Shiprocket has also signed MoUs with DGFT to set up a capacity-building programme across 16 districts. 

“Ecommerce presents a unique opportunity for MSMEs to access global markets and we believe India can easily cross a USD 200 billion cross-border export target by 2030. However, we need to address the existing challenges around payments and customs that are hindering this growth. Through initiatives like ecommerce export hubs, we are working closely with the government and partners to create a conducive ecosystem for MSMEs to thrive in global trade," said Vinod Kumar, Trustee, First India and President, India SME Forum. 

Earlier this year, the government revealed that it plans to establish ecommerce export hubs (ECEHs) to streamline and boost ecommerce exports, particularly for MSMEs. This initiative aims to tackle key challenges by simplifying cross-border transactions, reducing compliance burdens, and driving growth in international markets.

Talking about recommendations, experts noted that payments reduced by less than 25 per cent should be considered settled immediately by banks. For reductions over 25 per cent, banks must follow a write-off process based on exporters’ documents justifying the variance. The process should be reviewed quarterly or semi-annually. 

Ecommerce exporters should be given nine months for payment realisation and document submission. The reconciliation model should be annual or semi-annual to reduce compliance burdens, saving time and costs for high-volume industries.

For already outstanding shipping bills, a quarterly aggregate reconciliation should be allowed without the 25 per cent variance cap, they noted. Additionally, an ecommerce export policy framework should be established, simplifying provisions for small-value bills and direct reporting to the EDPMS. Policies should ease the re-import process, exempt returned items from duties, and provide refunds for items re-entering India, reducing financial burdens for small sellers.