Govt invites proposals to set up E-Commerce hubs

NEW DELHI : The government on Friday invited proposals from companies to set up E-commerce Export Hubs (ECEH) in the country that will be first launched on a pilot basis. The companies have been asked to submit detailed proposals to the Directorate General of Foreign Trade (DGFT) for examination, support and hand holding.

Further to the pilot launch and suitable feedback, notifications and circulars shall also be issued, a trade notice by the DGFT said.

In the Foreign Trade Policy of 2023 the intent and roadmap for setting up e-commerce export hubs was outlined. They have been proposed as designated areas, which would act as a centre for favourable business infrastructure and facilities for cross border e-commerce activities.

The major objectives of ECEH are to provide for predictability and shortest possible turnaround time for e-commerce exports, easy re-import for e-commerce returns or rejects, and bringing various cross-border stakeholders under one roof. The handling of product returns and flexibility in payment realisation essential for e-commerce exports would require a change in regulations by the customs department and Reserve Bank of India (RBI).

E-commerce exports need flexibility on payments for shipments as selling prices fluctuate in this medium. The draft of Foreign Exchange Management (Export and Import of Goods and Services) Regulations 2024 released by Reserve Bank of India (RBI) also proposes flexibility on payments received for exports. If implemented it will also facilitate e-commerce exports. 

The DGFT also released the draft modalities for setting up these export hubs. ECEH shall have two distinct segregated areas. First will be the fulfilment area for packing, labelling, storing and other activities till a buyer is found. The second area will be a customs station where the goods will be customs cleared after the buyer is found, ready for dispatch. 

ECEH will function to achieve agglomeration benefits for e-commerce exporters like storage, packaging, labelling, certification and testing and other common facilities for the purpose of exports. 

These hubs are likely to come up near airports and ports. The hubs would be set up by the industry and would not involve any financial commitment from the government. The FTP had hiked the consignment-wise cap on e-commerce exports through courier to Rs 10 lakh from Rs 5 lakh.As per estimates, e-commerce exports potential for India is in the range of $200-300 billion by 2030. Global e-commerce exports are expected to touch $2 trillion in 2030 from $800 billion now. India’s exports through this medium is only about $ 5 billion as compared to China’s $ 250 billion annually.

China, which is a leader in e-commerce exports, is also a pioneer in export hubs for e-commerce. China’s exports through this route are 6.4% of its total merchandise exports in 2023 while for India this figure stands at $ 1.14%