Stock-based ecommerce export model for MSMEs to be discussed next week

The commerce and industry ministry will next week hold stakeholder consultations to introduce an inventory-based e-commerce export model under which the proposal is to have dedicated export entities which would hold inventory and manage processes related to customs, compliance and packaging on behalf of MSMEs.

The discussions come amid the government mulling new ways to boost exports and reduce the impact of steep 50% American tariffs on small exporters. Issues related to existing restrictions on foreign direct investment (FDI), the need for explicit carve outs, strict separation of export and domestic inventory and the roadmap for a pilot programme are likely to be taken up.

"Work is going on to building resilient supply chains to prevent future shocks as part of which e-commerce export hubs are being operationalised. Alongside, there is a proposal for inventory model for e-commerce exports would allow third-party facilitation entities to manage compliance and logistics," said an official.


The consultation is likely to be held on September 15.

At present, 100% FDI is allowed under the automatic route in the marketplace model of e-commerce but not in the inventory-based model. "The idea of this third-party export facilitation model is to ease the burden on MSMEs and enable them to focus on quality and branding," the official added.

Besides updates to the country's FDI guidelines and review of the prohibition on inventory-based e-commerce for export-only models, the consultation could focus on the amendments to the foreign trade policy, mechanism for export entities to claim GST refunds and duty remissions and safeguards to prevent misuse of seller-level data.

Officials from departments of posts, revenue, Reserve Bank of India, major e-commerce players, logistics companies and associations representing small and medium enterprises are likely to be part of the consultation.