Director General of Foreign Trade, Santosh Kumar Sarangi, highlights the need for significant policy adjustments, stating that current trade regulations primarily cater to the B2B interface. However, with the rise of eCommerce, there is a fundamental shift towards a higher B2C interface. This calls for comprehensive policy tweaking, according to him.
He stated that like traditional exporters, one who is exporting through eCommerce must also get the advantage of remission of tax and duties.
In 2025, cross-border eCommerce exports around the world are expected to touch $2 trillion. On the other hand, India’s e-commerce export potential by 2030 is estimated by the foreign trade policy to be between $200 billion and $300 billion yearly.
Businesses must register with the Indian Customs Electronic Gateway (ICEGATE), which is managed by the Central Board of Indirect Taxes and Customs, to do cross-border business. This electronic system serves as a communication channel between users of the trade and the Customs division and as a focal point for information sharing with third-party trading partners.
The shipping bills record maintained on ICEGATE play a crucial role in finding out the value of exports, which serves as the basis for calculating incentives such as refund of duties and taxes incurred during the manufacturing process.
“Theoretically, tax remission is available to any exporter who is exporting with an IEC code. With regard to e-commerce, sometimes it may not be the producer who might be exporting, so the seller on record and exporter on record are different in e-commerce.”
Nevertheless, regardless of the entity involved in exporting, they are entitled to remission as long as the Electronic Customs Clearance System (ECCS) establishes effective communication with ICEGATE and facilitates the flow of information to the appropriate channels. This emphasis on seamless information exchange is crucial for ensuring that eligible exporters, including those in the eCommerce sector, can avail themselves of the necessary remission benefits.
Sarangi further stated, “As of date, we are in talks with the department of revenue, CBIC, to ensure that the ECCS and ICEGATE have an integrated system which will allow shipping bills to flow into ICEGATE”.
Similarly, the posts department also offers eCommerce facilities, and making certain that export postal bill flows without any hassle into ICEGATE is also a necessity. “So on all of this, we are working to ensure that systems start talking to each other. Once they start doing it, the export benefit will also flow into the hands of e-commerce exporters”, said DGFT.
He stated that in addition to government agencies, discussions are also ongoing with stakeholders like courier services and major e-commerce companies like Amazon, Flipkart, and eBay to guarantee that the e-commerce ecosystem is improved.
The government anticipates that 15%–20% of exported goods through e-commerce may be returned. This contrasts with typical B2B exports where the entire consignment, and not just a portion of it, is rejected.
Many steps have been announced in the policy and are expected to be taken for making exports through eCommerce effortless.