E-Commerce Exports

Banking And Finance For Exports

With the launch of the New Foreign Trade Policy 2023, Government of India has set a target of USD 1 Trillion of merchandise exports by 2030 aiming for a compounded annual growth rate of 12.2%. To achieve these targets, export growth is expected from new and emerging sources. One such source is Cross-border E-Commerce trade. Global Cross-border E-Commerce is estimated to grow to USD 800 Billion by 2025 and up to USD 2 Trillion by 2030.
E-Commerce would account for around 6.6% of overall global merchandise trade. India’s share in the growing E-Commerce Exports segment is also poised to grow at an accelerated pace.
E-Commerce offers access to a larger global market in addition to domestic sales. The sellers on E-Commerce platforms can utilise a suite of integrated service such as - cataloguing, marketing, pick-up & delivery as well as receive and reconcile the export payments. This results in reduced time & cost for the seller, allowing more time & focus on their product, packaging, marketing etc.

  • Fostering E-Commerce Exports through DGFT Initiatives

    The Foreign Trade Policy (FTP) 2023 has a stated objective to enable cross-border E-Commerce for artisans, weavers, craftsmen, and MSMEs, in coordination with stakeholder Departments.
    Directorate General of Foreign Trade (DGFT) Regional Authorities are working to actively promote E-Commerce Exports through collaborative efforts with Customs Authorities, Department of Posts Industry Partners, and Knowledge Partners, with an emphasis on creating awareness & skills, and knowledge-sharing with exporters and entrepreneurs.
    DGFT is also working with government stakeholders to resolve payment and banking issues, Customs-related matters to provide a leveled platform to E-Commerce Exporters.
    The Department of Post is expanding the network of Dak Niryat Kendras (DNKs) linked with Foreign Post Offices (FPOs) to accelerate India’s exports through the Postal Route. DGFT endeavors to work with the regional Postal Offices to facilitate new entrepreneurs for increasing B2C Exports through the Postal Route.

  • What to Sell?

    Focus - on India’s Strengths
    India has a comparative advantage in certain sectors/ products. Focusing on these sectors/ products will enable the seller to garner higher profit margins, establish their brand identity and would require lesser marketing/ promotion as they are already well recognised. The following is a list of such sectors:
    Textiles, handloom and apparel
    Leather & Leather goods
    Handicrafts and Home Décor
    Beauty and Personal care
    Semi-precious jewellery & accessories
    Automotive parts
    AYUSH and Herbal products
    Spices and food products
    Tea and Coffee
    Engineering goods
    Religious artifacts

  • Explore Foreign Demand Sources

    The next step towards exporting is to analyse the foreign demand for the product and target the markets, segments, age-groups that are best suited for your product.
    To understand the product or market of your interest browse through the E-Commerce platforms of the country to check the demand and pricing of similar products.
    Actively visit and attend Trade Fairs, Buyer-Seller Meets and Reverse Buyers Seller Meets both in India and abroad.

  • Check on Regulatory Requirements for Exports

    In order to export, the basic requirement is to know the Indian Tariff Classification (Harmonized System) ITC (HS) of a product. You may search for the ITC (HS) on the Customs (CBIC) or DGFT websites.
    Based on the ITC (HS) classification the regulatory requirements need to be verified. Non-compliance can result in penalties in India or issues at the country of export. Exporter must be aware of the following:
    Export Policy: Exporters must be well aware of the export policy related to their products
    Certification Requirement: Partner Government Agency (PGA) certification requirement applicable on the exported products. For example- for pharma exports, certification is required from Central Drugs Standard Control Organisation (CDSCO), Organic Products are certified by APEDA, etc.
    The export of goods is governed by the export policy notified by DGFT, from time to time. On the basis of ITC (HS) classification, the Export policy broadly classifies the goods as 'Free', 'Restricted' and 'Prohibited'.
    Free - All goods can be exported freely if they are not mentioned in the classification of ITC (HS).
    Restricted - An Export License is required to export restricted goods, and must be exported as per the procedures/ conditions specified. Such items are limited in number.
    Prohibited - These items cannot be exported at all. Such items are limited in number and include animal parts, nuclear material etc.

  • When & Where to Sell

    The "When and Where to Sell" strategy is essential for E-Commerce. It involves market research to identify target regions, population segments, etc. for expansion of sales
    Local demand
    Cultural nuances
    Seasonal trends

  • Focus on Shopping Behaviours

    An approach to regional targeting involves understanding of a country's shopping behaviours. Regions with a strong propersity towards online shopping may be identified as high-potential markets and should be targeted effectively. Some key regions to consider:
    Asia-Pacific - In Asia-Pacific, Australia, Japan, and China are the largest E-Commerce markets
    Europe - Germany, France, UK are the largest E-Commerce Markets of Europe
    Latin America - Brazil and Mexico represent potential E-Commerce markets marked by a rising online shopping trend. Some challenges exist due to limited payment mechanisms for these regions.
    USA - Huge market opportunity due to better internet penetration, increasing E-Commerce shopping trends, streamlined policies.

  • Focus on Indian Diaspora, Festivals, Sales Events

    Persons of Indian Origin (PIO) living abroad are a key target demographic with demand for products from India. This presents an opportunity for Cross-border B2C E-Commerce sales, particularly for India-centered products like handicrafts, pooja/ festive items, locally crafted goods, other items with a strong Indian theme.
    Exporters should focus on and target specific holidays/ festivals when the demand for products is higher.
    Sellers must also monitor global sales events, seasonal sales trends and festivals celebrated in the various regions.
    Besides global sales events, seasonal drivers such as back-to-school shopping etc., may also be kept in mind and leveraged suitably.
    Sellers may also offer discounts and promotions to attract customers from different countries and regions

  • Explore Foreign Demand Sources

    The next step towards exporting is to analyse the foreign demand for the product and target the markets, segments, age-groups that are best suited for your product.
    To understand the product or market of your interest browse through the E-Commerce platforms of the country to check the demand and pricing of similar products.
    Actively visit and attend Trade Fairs, Buyer-Seller Meets and Reverse Buyers Seller Meets both in India and abroad.

  • How to Sell

    Pricing Strategies
    It is important to have a clear and dymanic pricing strategy in place before entering any market. Good pricing strategies help determine sales and profits while staying competitive.

  • How to Find Marketplace Online

    How to Design Catalogue For Your Products
    An online catalogue works like a shop window for an online E-Commerce product. Whether someone sells on their own site or through an online marketplace, it is crucial to organize the catalogue to match the brand and products. A visually appealing catalogue helps draw attention of the buyer to build a strong customer base. Some key points to note when designing a catalogue are:
    Simple and concise product descriptions - The product descriptions should be informative and include all important features. A good product description should be SEO friendly, i.e., include keywords that help search engines rank them.
    Sharp and clear product images - As customers do not have the option to physically interact with the product, sharp, clear images are essential for enhancing its appeal. Features like 360-degree product views can further improve the showcasing experience.
    Functional and visually pleasing - An effective seller page should offer minimal navigation and serialised product listings. For example, grouping similar products, as customers tend to purchase complementary items.
    FAQs (Frequently Asked Questions) - Whether in chat-based or pre- documented formats, covering aspects of the product that have not been covered in the product description should be provided.
    Various Freely available templates on the internet may also be explored for catalogue designing.
    You may also consult the E-Commerce Platforms directly for support on listing and cataloguing services.
    Sellers can also employ online resources that provide cataloguing services free of cost. You may use the online websites for your cataloguing needs.
    A straight forward way is capture some visually appealing photos of your product, then search for one of these websites online and follow the given steps
    Step 1: Sign up and register yourself on the catalogue website.
    Step 2: Enter the product information: Product Name: Enter a descriptive name for your product.
    Category: Choose the appropriate category or create a new one.
    Description: Write a detailed product description.
    Price: Set the selling price.
    Upload high-quality images of your product
    Step 3: Once all product details are entered and confirmed save and download the catalogue for use on various sites or for social E-Commerce.

  • Packaging Your Products

    Various Packaging services are offered by E-Commerce service providers and Courier service providers. Exporters must ensure the following when packaging goods before shipment:
    a) Every parcel must be packed & closed in a manner with due regard to:
    (i) the weight & nature of the contents;
    (ii)mode of transport and the length of the journey;
    b) The packing and closing must protect the contents so that these cannot be damaged in repeated handling.
    c) Packaging must be such that it is not possible to tamper with the contents without leaving a trace of violation.
    d) The parcel should be protected against major changes in climate, temperature, atmospheric pressure or conveyance by air.
    e) It must be packed in a way as not to endanger the health of officials and to avoid any mishap/ injury to officials called upon to handle it or to soil/damage other parcels or postal equipment.
    f) It must have, on the packing or the wrapping, sufficient space for the entry of service instructions and for affixing stamps and labels.
    g) Items such as precious metals, glass, fragile objects, liquids, ointments, resin etc. must follow special packing conditions. Please check with your logistics provider for details.

  • Key Documentation Requirements

    The documentation required for undertaking E-Commerce Exports from India can be broadly divided into two categories, first- general documents required for exporting from India and second specific product-based requirements. General Documentation requirements are as follows:
    PAN: It is necessary to a establish a firm of some nature (proprietorship, partnership, LLP, Limited company, Trust, Society etc) and to obtain a PAN for the same firm.
    Bank Account & AD Code: A bank account in the name of the firm is required. The authorised dealer (AD) code of the concerned bank branch may be noted.
    GST number: For exporting from India an exporter is required to and thereafter obtain a GST number.
    IEC (Importer-Exporter Code): This is a key business identification number as no Exports or Imports may be effected without mentioning IEC. The process of issuance is fully online and automated. For availing an IEC, login to the DGFT website.
    The product specific permissions and documentary requirements may vary for different products. Suitable research & due diligence may be undertaken before exporting.

  • Choosing the Right Logistics For Your Needs

    To provide a competitive price to the consumer and in order to reach the consumer time, an optimised and efficient logistics plan is a must. While traditional domestic E-Commerce business logistics involves following 3 aspects-
    collection and storage of goods
    picking and sending orders
    processing returns or rejects Cross-border E-Commerce logistics involve given business operations as wekk as border crossing procedures. A fast and reliable delivery and customs clearance in India and at the destination coutry is key factor in exports through E-Commerce. There are four main types of cross-border E-Commerce logistics providers: Postal Service
    Shipping service
    Returns covered 4 PL Logistics Providers
    Multiple Courier Options to choose
    Doorstep Pickup & Delivery
    Shipping service
    Returns covered International Logistics Service Providers
    Doorstep Pickup and Delivery
    Shipping service
    Returns covered E-Commerce Affiliate fulfilment models
    Managing Inventory
    Warehousing/ Storage Service
    Integrated Pickup & Delivery
    Shipping services
    Returns covered

  • Exports through the Postal Route

    Exports though Posts are shipped through 28 FPOS and over 700+ DNKs locations across the country.
    India Post currently offers the following range of products for exports through postal route:
    To Ship via India Post
    1. Ensure you have a valid IEC (Importer Exporter Code).
    2. An exporter has to register with the Customs authorities with IEC and AD Code of the merchant bank.
    3. Choose the appropriate Postal Bill of Export (PBE) form:
    PBE I for E-Commerce exports
    PBE II for Exports other than E- Commerce
    4. Complete the necessary declaration forms based on the value of your articles:
    CN22 for articles below SDR 300 in value
    CN23 for articles with a value of SDR 300 or above
    5. For International Tracked Packet Service articles use a Harmonized Label.
    6. Take your shipment to the Nearest Dak Niryat Kendra for acknowledgment and tracking number assignment.
    7. Present the PBE consignment to Customs for review and obtain a "Let Export Order" if approved.
    8. Customs will keep the original PBE form and provide the duplicate.
    9. The Postal Authorities will furnish proof of export, such as copies of relevant CN/ CP forms, to Customs at the Foreign Post Office (FPO).

    Exports through the Courier Route
    Courier Shipping Bill (CSB) is the main document in the export process via courier services.
    1. Choose the appropriate Courier Shipping bill form:
    CSB-4 is for exports under INR 50,000 for Samples/ Non-Commercial Value)
    CSB-5 is for exports under INR 10,00,000 (Commercial Shipments)
    2. Gather necessary documents: GST details, IEC, HSN code, and AD code.
    3. Create a detailed invoice with itemized pricing and relevant information. Check eligibility for potential benefits under the Government of India schemes.
    4. Prepare shipment details, including product description, quantity, value, and recipient's information.
    5. Contact an authorised courier service provider (as notified under ECCS platform) and provide them with shipment details including product info, GST, IEC, HSN code, and AD code.
    6. Provide shipment details to the department for GST compliance.
    7. Ensure all information and documents are in order before the courier provider ships your goods.

    Filing of IGST Refunds under Courier/ Postal Exports
    Sellers can follow the given procedure to file for IGST returns:
    (i) Generate the Shipping Bill: Once your shipping bill is generated, ensure that all the required details, such as invoice number, port code, and shipping bill information, are accurately filled out in the shipping bill document.
    (ii) GSTR-1 Form: All registered users need to file the GSTR-1 form on the GST portal. Within the GSTR-1 form, locate and select "Table-6A." This is the section where you need to provide details related to your export consignment.
    (iii) Fill in the required information in Table-6A. This typically includes: Invoice number for the exported goods, Port code specifying the port from which the goods are being exported, shipping bill details, including the shipping bill number.
    It may be noted that the regulation of filing a shipping bill on ICEGATE depends on the mode of shipment:

    For postal exports through India Post, the Department of Posts will handle the shipping bill filing on your behalf.
    For courier exports, the Authorized Courier will be responsible for filing the shipping bill.

  • Handling Returns & Rejections

    The authorised courier has to file the Courier Bill of Entry for re-import for the same Importer-Exporter Code (IEC) holder and at the same international courier terminal, for whom and where the corresponding Courier Shipping Bill (CSB) for the item was filed.
    The return E-Commerce transaction for the item is initiated by the same consignee to whom the item was exported under the corresponding Courier Shipping Bill (CSB-V) and on the same E-Commerce platform provided a courier agent or logistics service provider in the country of consignee may also initiate return E- Commerce transaction if the product could not be customs cleared for import in that country.
    The image of the return confirmation page on the E-Commerce platform is uploaded on Express Cargo Clearance System (ECCS) while filing Courier Bill of Entry for such re-import.
    The reason of re-import is provided in the Courier Bill of Entry and the returned item is re-imported along with the original packing;
    As per Courier Imports and Exports (Electronic Declaration & Processing) Amendment Regulations, 2022 new provisions have been introduced to support easy return for E-Commerce exporters.
    The newly introduced provisions under the following regulations are specific for courier re-import of jewellery subject to certain conditions. However, the Regulations do not provide for exemption of import duty on re-imports.

  • Onboarding E-Commerce Platforms

    To generate Export demand, one must present their goods on Global E- Commerce plaforms. Onboarding on such platforms is a mutli-step process. Some of the cost involved in the said process is presented as follows -

  • Exporting through Social E-Commerce

    Exporters should also leverage Social Media for Social E-Commerce to promote their products and services. This shall help create awareness, generate leads, build trust, and drive conversions about your products to a large Social media userbase. For example: selling through sites like Facebook marketplace, Whatsapp business, Instagram, Telegram etc. To sell through Social E-Commerce:
    Step 1: Set Up A Business Account: In order to start selling on the platform, the sellers must register and set up a business account, complete their Business Profile, including contact details on the platform.
    Step 2: Get Approved: Comply with policies for trustworthiness. Verify your domain, enhance authenticity and reach.
    Step 3: List/Catalogue: Using Catalogue Manager Tool, add images, title, price, description, & other relevant details of the product. Categorise products carefully in order to reach out to the target audience.
    Step 4: Set up A Checkout Account: Set up a checkout account to enable buyers to purchase from listings.

  • Selecting the Right Payment Method

    The payment settlement while exporting through E-Commerce can be broadly classified into three categories
    E-Commerce platforms’ integrated payments service.
    Online payment gateway service providers.
    International money transfer services through agents.

  • Payment Terms & Methods of Receiving Payments

    When you register on any E-Commerce platform for the purpose of exports, the platform may charge a certain commission for processing your items and delivering it to the end user.

    Some important features to keep in mind when selecting a money transfer service for receiving payments:
    Exchange Rates: Banks and transfer services use the mid-market rate to trade with one another. Different providers may offer different rates, so compare what they offer to the standard rate. Choose the one with the smallest difference.
    Transfer Fees: Service providers charge transfer fees that can be a fixed flat rate or a percentage of the transfer amount.
    Transfer Speed: If you need quick transfers, you can pay extra for express delivery.
    Transfer Limits: Check the allowable limit and choose the best suited service.
    Discounts: Avail deals like free transfers on sign up and discounts for large transfers by various service providers.
    Safety: To ensure safe transfers, use service providers that comply with the laws and regulations in India and the buyers’ country.

  • RBI Guidelines

    Period of realization
    It is obligatory on the part of the exporter to realise and repatriate the full value of goods to India within 9 months from the date of exports.
    For goods exported to a warehouse established outside India, the proceeds should be realised within 15 months from the date of shipment of goods.
    RBI also allows AD Category – I banks to extend the payment period from the export date up to 6 months at a time, regardless of the invoice value, as long as certain conditions are met.

    Manner of receipt
    (i) To receive payments, please follow the rules in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations, 2016, as in RBI Master Circulars (as amended from time to time).
    (ii) Processing of export related receipts through Online Payment Gateway Service Providers (OPGSPs) is available for export of goods of value not exceeding $10,000.
    “Write-off” of unrealized export bills
    In case an exporter is not able to realise the outstanding export dues, the exporter may either self-write off or approach the AD bank concerned, who had handled the relevant shipping alongwith appropriate supporting documentary evidence.
    AD bank, on request of the exporter, may in respect of certain cases, also write-off unrealised export bill without any limit, provided the bank is satisfied with the documentary evidence produced.

    Opening/ Hiring Warehouses Abroad
    As per the RBI Master Circular, AD Category – I Banks may consider the applications received from exporters and grant permission for opening/ hiring warehouses abroad subject to certain conditions:
    Applicant’s export outstanding does not exceed 5% of exports made during the previous financial year.
    Applicant has a minimum export turnover of USD 100,000/- during the last financial year.

  • Export Data Processing and Monitoring System (EDPMS)

    EDPMS is an online module for all Indian banks to record exporters’ transactions with them online. As per RBI Master Circular, AD banks should maintain Export Bills Register, in physical or electronic form aligned with Export Data Processing and Monitoring System. The bill number should be given to all type of export transactions on a financial year basis (i.e., April to March) and same should be reported in EDPMS. While Courier Exports are registered under EDPMS, exports through Postal Route are not updated in EDPMS currently.

  • Electronic Bank Realisation Certificate (e- BRC)

    Banks also generate Electronic Bank Realization Certificate (e-BRC) for purposes as specified under the Foreign Trade Policy. The eBRC system is currently being revamped to provide a simpler option for reconciliation of export realizations.

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