India needs to harmonize its retail policy for online and offline sellers and focus on digital handholding and capacity building to create a robust MSME ecosystem, Dr Avik Sarkar, Professor, Indian School of Business said during a panel discussion on “FTP priorities for the MSME Sector”.
“we should have common policy for the retail segment as a whole barring a few aspects of ecommerce. In general, there should be common regulation whether the product is being sold online or offline and that is a study that we had done at Indian School of Business sometime back that talks about a parity between online and offline.”
Sarkar also underlined the growing importance of a simplified export mechanism for India to remain globally competitive.
“Ecommerce can boost export for the MSME segment. As we all know, the traditional export route is quite difficult and complicated. You have to go through associations, you have to go through trade bodies, you have to send samples of products to the foreign countries and often people might like it. Ecommerce has made it simple for a lot of the players to take advantage of. Several MSMEs are exporting through the E commerce route but their percentage is still quite low. So, there has to be a push for MSME ecommerce export in the upcoming foreign trade policy,” he said.
Sarkar noted that the union budget has looked at long-term perspective to build India’s MSME sector especially focussed on infrastructure development and digital training.
“Since our E commerce setup is mostly attached to the cities, there is still a large part (about 60%) of the population especially in rural areas which are mostly unserved. They have a buying potential but we do not have a successful model to reach out to them. And making warehouses in those areas might not be economical for the e-commerce companies as they would ideally like warehouses outside the big metro cities rather than outside a small district town. So, with the focus on infrastructure in current budget, we will be overcome this impediment to a large extent,” explained Sarkar
Citing report by Indian School of Business, Sarkar said that only 10 to 15% of MSMEs or small sellers are today taking advantage of the E commerce platform, whether it’s Amazon or Flipkart, or any any one of them in India. There is massive scope for manufacturers and SMEs to onboard the ecommerce bandwagon.”
He also stressed the need for digital handholding and training for MSMEs.
“The government has talked about digital handholding and training MSMEs. Government has said they will impart skills on digital aspects through doordarshan and other channels. I believe there should be customized courses for MSMEs-on maintaining stocks, effective supply chain management and a range of other things. There is a need for education and capacity building which has come up in the current budget. So, the focus on infrastructure and education will help the MSMEs in the long run,” he said.