Payment woes, compliance burden hampering export potential of MSME e-commerce: Experts

Time of India

3 days ago

India's
e-commerce exports
are witnessing remarkable growth, offering immense opportunities for small businesses in the country. However, challenges such as
payment reconciliation
,
regulatory compliance
, and foreign exchange settlements continue to impede the sector's full potential. With the nation's e-commerce exports expected to reach $200 billion by 2030, experts emphasised that tackling these regulatory and operational issues has become a pressing necessity.
Industry players often have cautioned that India could lose its recent progress unless regulators take swift action. To deliberate on practical solutions, think tank
Empower India
partnered with the Indian Institute of Foreign Trade (IIFT) to host a webinar on July 2, bringing together academia, government-affiliated bodies, and industry leaders.
Moderated by Nirupam Soundararajan, Co-founder of the Policy Consensus Centre, the session featured three panellists: Deepankar Sinha, professor at IIFT; Atul Bansal, Head of Marketing & Partnerships, Amazon Global Selling; and Naveen Sharma, Co-founder of the All India Ecommerce Exporters Association (AIEEA). All industry stakeholders concurred: automation, simplification, and streamlining are necessary.
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'All the data for e-commerce exports already exists across EDPMS (Export Data Processing and Monitoring System), DPMS (Department of Payment and Settlement Systems), and the RBI. It's time these systems talk to each other. Exporters shouldn't be burdened with manual reconciliation when technology can automate it. A one-time declaration should suffice—especially under LUT when exporters are already legally accountable. In the short term, we need a tiered, trust-based approach: small exporters under Rs 10 lakh could be exempted from manual reconciliation, while larger entities submit a CA certificate,' said Sharma.
Bansal outlined Amazon's efforts to 'democratise e-commerce exports for MSMEs' through its Export Navigator tool, which is open to all sellers and provides guidance on documentation, compliance and regulations. 'We have pinpointed launch readiness, logistics and payments as the three biggest challenges,' he observed. 'While Amazon has addressed the first two, payments and reconciliation require broader ecosystem collaboration. We remain optimistic, but it will take coordinated action across platforms, banks and regulators.'
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Prof. Sinha talked about the problem in terms of cost and efficiency, cautioning that 'hidden fees in gateway charges, platform commissions, bank deductions and compliance expenses are eroding exporters' margins. 'Many chase bulk orders or switch platforms to chase better terms. This simply isn't sustainable. Once payment is received and the shipping bill filed, RBI and DGFT should have that data in real time. India is a global technology powerhouse; manual processes should be obsolete,' he said.
Panelists agreed on a three-pronged road map:
System integration: Automate reconciliation by linking the EDPMS, DPMS, RBI and DGFT platforms and creating a single-window interface for exporters.
Trust-based thresholds: Exempt exporters with annual shipments under Rs 10 lakh from manual reconciliation, while larger exporters furnish independent certification.
Flexible mismatch tolerance: Temporarily raise the permissible gap between invoiced value and payment received from 25% to 50% to accommodate currency fluctuations and platform deductions.
Beyond these core reforms, the panel recommended developing a dedicated e-commerce export declaration format, standardising invoice structures across marketplaces, and launching a user-friendly technical portal for document uploads and real-time tracking. Such measures, they argued, would yield immediate relief while laying the groundwork for long-term system integration.
Regulatory experts in the audience noted that recent policy initiatives, such as the introduction of the LUT framework for zero-duty exports and streamlined foreign trade policy guidelines, provide a favourable backdrop for these recommendations. However, without targeted amendments to the existing reconciliation rules, MSMEs risk facing protracted delays, higher working capital requirements, and lost market opportunities.
Speakers further urged the government to treat e-commerce exports as a strategic national asset. 'If India truly wants to be a global digital trading hub, we must reduce friction at every touchpoint,' Sinha said, stressing the road map ahead will entail revisiting cost structures, cutting red tape and harnessing technology to eliminate manual bottlenecks.