DGFT and DoR close to finalising framework for E-Commerce export hubs

NEW DELHI : Setting up of the proposed E-Commerce export hubs, highlighted in Union Budget 2024-25, is being expedited with the Directorate General of Foreign Trade (DGFT) and the Department of Revenue close to finalising the framework to identify return goods for exempting from import duties and the process of notifying portions of existing logistics hubs as authorised zones being firmed up.

“The DGFT and the DoR are close to agreeing on the process of traceability of e-commerce exports and have narrowed it down to the framework within which it will operate. The agreement will contain details of the process flow of goods coming in and going out and goods returning,” an official tracking the matter said.

It is a matter of establishing the identity of the good exported from the e-commerce hub so that it can be confirmed that the same good is being returned, the official said. “The IT system of the e-commerce export hub entity has to establish traceability of its exports, and this system is being worked out, he added.

It will be much easier for traceability for an e-commerce exporter operating in an export hub rather than operating individually in a far-off city such as Indore or Mysore, the official said.

As rejects comprise about 25 per cent of all e-commerce exports, it is important that the matter is sorted out before the e-commerce export hubs start operations.

Since about a fourth of goods sold online are returned, a detailed agreement and arrangement to identify these is very important.

E-commerce hubs are envisioned to serve as pivotal facilitators for export clearances, offering a wide range of services including warehousing, banking and credit, customs clearance, return processing, labelling, testing, and repackaging, per the government.

Since many e-commerce players are from the MSME segment, the hubs are also seen as avenues to promote exports from small players.

Once the required framework for the services to be provided in the e-commerce hubs is determined, setting up the zones will not take much time, the official said.

“Many of the existing logistics players have big warehousing facilities. They will have to designate a particular zone within that for this purpose. These can be designated as e-commerce export hubs once Customs examines them and satisfies itself that the designated area is good enough,” the official said.

India’s e-commerce exports annually are officially estimated at around $2 billion, while actually it may be over $4 billion, per some calculations. However, the potential to increase exports is huge as globally e-commerce trade is valued at $800 billion.