The Growing Impact of Indian MSMEs on eCommerce Exports in 2023

Micro, small, and medium-sized enterprises (MSMEs) in India have emerged as key players in driving employment opportunities, fostering innovation in export markets, and promoting entrepreneurship. These small-scale businesses in India operate with limited fixed assets and lower operating costs, particularly in the trade sector.

India is poised to become the third-largest consumer market globally, trailing only the United States and China. With the exponential growth of eCommerce in the post-pandemic era, Indian MSMEs now have the opportunity to reach a global audience and secure sales from around the world.

eCommerce's Impact on Indian MSMEs

Presently, approximately 43% of Indian MSMEs engage in online sales within the country. When compared to their counterparts in other emerging eCommerce nations like China, Brazil, and Indonesia, nearly all Indian MSMEs (100%) possess online websites, employ online marketing tools for product promotion, and conduct borderless transactions through eCommerce payment gateways.

However, when compared to global markets such as the US and the UK, the adoption of eCommerce by Indian MSMEs remains relatively low, with only 5% of them having a website, and 50% having domains in foreign countries.

For micro businesses, nearly 75% have embraced eCommerce as a means of international trade due to the internet's support in challenging traditional norms and leveraging technology to streamline orders shipped to distant destinations.

The Role of the Indian Government in MSME Growth

Interestingly, foreign trade now accounts for 45% of India's GDP. In recent years, the Indian Government has introduced several campaigns and initiatives, such as Atmanirbhar Bharat and Make In India, to support the MSME sector. These programs promote local manufacturing hubs and facilitate business marketing through eCommerce platforms, thereby fueling the growth of local businesses both domestically and internationally.

The Contribution of the Logistics Sector

The global logistics sector plays a vital role in ensuring seamless transportation of eCommerce orders across borders, be it individual parts or complete packages. However, SMBs face challenges due to a lack of awareness regarding compliance in cross-border trade and essential regulatory information.

The Role of 3PL Solutions

Fortunately, various third-party logistics (3PL) solutions have partnered with government export organizations like the Federation Of Indian Export Organisations (FIEO) to provide comprehensive support and updated information to MSMEs, enabling them to expand their export horizons. These logistics solutions offer simplified documentation, automated tools for certain product categories (e.g., gems and jewelry, pharmaceuticals, health tech), and multiple courier options for global reach within desired timelines. By working with reliable cross-border logistics operators, businesses can not only target the right markets but also navigate regulatory issues and avoid penalties at destination ports.

In Summary: eCommerce Empowering Global Expansion for Indian MSMEs

In 2023, the MSME sector is playing a pivotal role in driving eCommerce exports from India. The increased limit of ₹10 lakhs for bulk shipments under the Central Sales Tax - Voluntary (CSB-V) scheme has facilitated the expansion of SMBs with minimal restrictions on shipment volume. Logistics solutions like Shiprocket X have further streamlined operations by offering features such as shipping mode selection, payment tools, digitalized documentation, and automated ecosystems. As a result, small businesses can scale more quickly and hassle-free when it comes to cross-border shipments.

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