Why addressing the challenges on E-Commerce Export Hubs is crucial to its success
Finance Minister announced the establishment of E-Commerce Export Hubs (ECEHs) in this year’s budget to enhance merchandise exports through cross-border e-commerce. This initiative was introduced in response to the various challenges faced by Indian MSMEs, including intense competition from other Asian nations such as China and Japan, disruptions caused by the Russia-Ukraine conflict, and other macroeconomic issues. In addition to geopolitical challenges, the fragmented and predominantly B2B-focused Indian regulations that govern e-commerce exports today, impose significant compliance burden on the small businesses. To address these challenges, the proposed ECEH model aims to consolidate various stakeholders within a unified regulatory and logistical framework to streamline and facilitate e-commerce exports.
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Following the budget announcement and in line with Chapter 9 of the Foreign Trade Policy, 2023 (FTP 2023), the Directorate General of Foreign Trade (DGFT) released the Draft Modalities for the Pilot Launch of ECEHs. As per the Draft Modalities, the ECEH Model will involve setting up of export hubs that offer a range of integrated services, including storage, packaging, labelling, certification, testing, and other facilities essential for the export operations. The ECEH Model will also seek to streamline and rationalize the compliance-related challenges through integration of an Electronic System, maintained by certain ‘ECEH operators.’ In this manner, the ECEHs will function as a centre for conducive business infrastructure and thereby facilitate the Indian MSMEs and
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