Inside NITI Aayog's plan to build India's Alibaba for MSMEs

NITI Aayog is working on various mechanisms to encourage small businesses in India to get on to online portals to expand their reach to non-urban areas and outside the country.

BCCL
NITI Aayog may soon lay out a roadmap with a focus on providing universal e-commerce access to small businesses and traders.
New Delhi: India may soon have its own version of Alibaba—especially for small businesses and traders—with the government deliberating on ways to promote micro, small and medium enterprises (MSMEs) in the digital arena.

NITI Aayog is working on various mechanisms to encourage small businesses in India to get on to online portals to expand their reach to non-urban areas and outside the country. The government thinktank may soon lay out a roadmap with a focus on providing universal e-commerce access to small businesses and traders.

“Various options are being considered to encourage the online presence of small traders and businesses,” a government official aware of the deliberations said.


The plan will likely suggest solutions to address challenges in the e-commerce ecosystem that inhibit MSMEs from onboarding platforms like Amazon, scale up their business and tap markets overseas.

One option being considered is the setting up of an Indian version of Alibaba, the Chinese e-commerce giant, that would be backed by the government but developed and run by a private entity. “However, developing a platform would need technology and is highly capital-intensive and may take some time before it gets going,” said an industry official, who is part of the deliberations.

Besides, the government is evaluating various challenges that MSMEs face including the need for GST registration, cost competitiveness and other standard related issues that impact their prospects on international online retail platforms.
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“These may be addressed step by step as we plan to handhold MSMEs to build capacities and grow big,” the official said.

The industry, however, said the focus should be on addressing existing issues.

“The government should immediately try and iron out difficulties being faced by the industry onboarding the existing platforms,” said Anil Bharadwaj, secretary general of the Federation of Micro and Small & Medium Enterprises.
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