The government and the Reserve Bank of India (RBI) are in discussions to provide more flexibility to e-commerce players about the central bank's foreign exchange realisation policy.
"In normal B2B, they have a policy that foreign exchange realisation has to happen within 270 days. However, e-commerce would require a slightly different eco-system. So we are working with RBI to bring in flexibility in this payment realisation," Santosh Kumar Sarangi, Director General of the Directorate General of Foreign Trade, said on December 28.
According to Sarangi, while goods can be exported via e-commerce directly to consumers, they can also be exported, stored in warehouses abroad, and finally sold after a year or so.
"So a consignment which is leaving your territory but staying in a warehouse outside for a longer period would require a longer timeframe for a bank realisation certificate to be done. So in that context...we are talking to RBI for a more flexible timeframe for foreign exchange realisation," Sarangi, speaking at the launch of an e-commerce exports handbook for micro, small, and medium enterprises (MSMEs), said.
At the launch, the Indian government also signed a Memorandum of Understanding with e-commerce logistics firm Shiprocket to help MSMEs build capacity in 16 districts about e-commerce exports. This follows a similar MoU being signed with Amazon in November, and the government is also in talks with other e-commerce majors including Walmart, ShopClues, and eBay, Sarangi said.
"(promoting exports through e-commerce) was part of our Foreign Trade Policy's ambitious target to increase merchandise exports to $1 trillion by 2030," Commerce Minister Piyush Goyal said.
"The approach of the entire promotion of e-commerce around the world is to leverage India's traditional areas like processed foods. Millets and many other Indian agricultural goods have a lot of traction all across the world... We also have areas like spices, handlooms, handicrafts, footwear, and textiles in which India's traditional strengths can be a part of consumer spending in other parts of the world. And e-commerce will be the natural bridge to connect India's MSMEs and craftsmen...with the rest of the world," Goyal added.
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