‘E-commerce will help Indian exporters access global markets’

E-commerce will help Indian exporters to have greater market access and reach out to the global markets, said Dr Arpita Mukherjee, Professor, Indian Council for Research on International Economic Relations (ICRIER), in Twitter Space discussion hosted by the Plunge Daily on Tuesday. The discussion was also attended by Dr Badri Narayan Gopalakrishnan, head of the Vision India 2047 Development unit at NITI Aayog and Dr Avik Sarkar, Professor at the Indian School of Business (ISB) and former Head of Data Analytics Cell, Niti Aayog.

“Globally, there is a growing trend of express delivery or the fast track movement which e-commerce providers use. Earlier there were a lot of restrictions like weight restrictions and price limitations. Nowadays countries are removing these restrictions because there is a need for fast-track cargo. I think e-commerce will be the route through which Indian exporters will have global market access,” said Dr. Mukherjee, also an expert on policy-oriented research, in an interaction hosted by Ashutosh Bhattacharya, Public Policy Advisor & Editorial Director, The Plunge Daily.

Dr Badri Narayan Gopalakrishnan was of the view that a viable way to increase exports is by building a broader understanding of factors that affect export or import demand. “The government is definitely a stakeholder here, but apart from the government, we have to have a lot of other stakeholders. One of them can be the existing marketplaces like Amazon, the export promotion ecosystems of the country, different export promotion councils like the Federation of Indian Export Organizations, industry associations, expert associations and government agencies. I think they all need to come together,” said Gopalakrishnan, who has spent 20 years as an applied economist.

Dr Avik Sarkar, a Professor at the Indian School of Business (ISB), who has worked on a report on e-commerce released by his institution in September, said the government and these stakeholders should strengthen small e-commerce merchants to become major players in global exports. “We have to also look into technology, capacity building and onboarding a lot of the MSME onto the digital infrastructure. Many MSMEs are not even able to take advantage of domestic e-commerce because they have not yet digitized their businesses,” said Sarkar.

Dr Mukherjee was of the opinion that these MSMEs can become India’s biggest assets if they provide the necessary infrastructure, knowledge and financial help. “Businesses today are moving a lot online and even online business interactions are becoming common. In the past, e-commerce was used in countries like India for sending free samples. During the pandemic, they began to be sent for sending small consignments,” she said. “We are in an age of information technology and in all respects, you need to use this technology. Consumers are changing, and whenever consumers change, the producers adapt to the modes in which consumers want to shop. Most consumers in the world are moving towards online shopping and we need to consider that,” she added.

She also stressed building a transparent policy for foreign companies for investing in Indian e-commerce. “We did research for Invest India and the findings clearly said that our policy should allow a level playing field. Be it MSMEs or other companies into the e-commerce business, they should be allowed to operate through their best business model. Whether they choose to operate through the inventory-based model or through the marketplace model, that choice should be given to them”, she said. “Having said that, this fear of large players need not be addressed through the FDI regulation. FDI regulations should be focusing on creating a transparent environment for attracting foreign investment,” she added.

Dr Mukherjee insisted that government policies need an overhaul to promote exports. “We can have a limit on imports, but right now we also have a limit for exports. India is probably one of the few countries which have put an export value limit. Do we really need that?” she asked.