Opportunities and Challenges for SMEs under new proposed regulatory regime

Data-Indian control on data . Govt to be given access to source code, algorithms of AI systems Impose custom duties on electronic transmissions to reduce revenue loss. It bars sharing of sensitive data of Indian users with third party entities, even with consent. A ‘data authority‘ to look at community data

1. E-commerce in India
Opportunities and Challenges for SMEs
under
new proposed regulatory regime.

2. 2
Content
•E-commerce Market in India – An Overview
•Current Regulatory landscape for E Commerce
•Key Features of New Draft E-commerce Policy
•
•Challenges and Opportunities for SMEs under the new
proposed E-commerce policy
•Cross border trade vis-a-vis multilateral arrangement
i.e EAEU/BRICS

3. 3
E-commerce Market in India- An Overview - I
Source : Pricewaterhouse cooper 2019

4. 4
E-commerce Market in India- An Overview - II

5. 5
E-commerce Market in India- An Overview - III
•Market is dominated by Amazon and Walmart owned homegrown startup Flipkart
•eCommerce main website for such kind of aggregator services are
•Tourism: MakeMyTrip; Goibibo; Yatra; IRCTC
•Education: EduKart; Meritnation
•Healthcare: Portea; Healthkart
•Entertainment/ Ticket booking: Netflix; bookmyshow
•Real Estate: MagicBricks; Housing, 99 acres
•Fin-tech: PayTM, Freecharge, PayUmoney, Mobikwik, PhonePe
•SMEs contribute total of 51 million units which provide employment to around 117
million people. MSMEs manufacture more than 6,000 products, account for 45% of the
total manufacturing output and contribute 40% of total exports from the country*
•Ecommerce has proven beneficial to SMEs for their business but there are multiple
challenges due to the evolving ecosystem for ecommerce in the country
* UNIDO report on Ecommerce and
MSME 2019

6. 6
Main Players in E-commerce in India
.Government
Organizations
Private Companies Regulatory actors
https://www.ebiz.gov.inhttps://www.amazon.inReserve Bank of India –
Issued first guidelines in
2001 on internet banking
www.gem.gov.in https://www.flipkart.comThe Ministry of Electronics,
Information and Technology
https://www.irctc.co.inhttps://goshopmatic.comDepartment of Commerce
http://www.mca.gov.in https://bizongo.com Department of promotion of
Industry and Internal Trade
https://eauction.gov.inhttps://www.industrybuyin
g.com
Department of Legal Affairs
https://onlineservices.tin.eg
ov-nsdl.com/etaxnew/tdsno
ntds.jsp
https://www.indiamart.co
m
Department of Consumer
Affairs
https://eprocure.gov.inhttps://
www.aliexpress.com/
Ministry of MSMEs

7. 7
Key Regulatory Provisions of E-commerce in India
•Digital India, Start-up India, Make in India , Skill India
•Foreign Direct Investment Rule
•Definition of E-commerce
•Inventory Based or Marketplace Based
•Exclusivity
•Services Offered by the E-Commerce Entity
•Compliance Certificate
•Introduction of GST for Growth of E-commerce
•"inter-operability" among Prepaid Payment Instruments (PPIs) such
as digital wallets, prepaid cash coupons and prepaid telephone top-
up card

8. 8
Key Features of New Draft E- Commerce Policy
Data-Indian control on data . Govt to be given access to source code, algorithms of AI
systems Impose custom duties on electronic transmissions to reduce revenue loss. It
bars sharing of sensitive data of Indian users with third party entities, even with consent.
A
 ‘data authority‘ to look at community data.
Infrastructure development-The development of secure and stable digital
infrastructure; delivering government services digitally and universal digital literacy.
E-commerce marketplaces-Seeks to create level playing fields for SMEs, piracy,
counterfeiting, Consumer Oriented Customer Service, Ratings and Reviews
Regulatory issues- Interdisciplinary nature of ecommerce therefore broader,
harmonious approach to protect the interest of SMEs,
Stimulating domestic digital economy-Delivery of goods and services digitally,
logistics, infrastructure , interchangeability and interoperability of payment systems ,
Online Customs clearance
Export promotion-National Integrated Logistics Policy must take into account the
special needs of the sector. e-Commerce must be dealt with separately under the
Logistics Policy, lowering the cost of Indian exporters

9. 9
Challenges for SMEs with regard to E-commerce
in India
•Unskilled staff
•Lack of expertise peripheral activities in Technology
integration and perception gap
•Lack of training
•Different pricing models across platforms
•High cost of finance
•Mobile apps by platforms
•Preference for credit

10. 10
Opportunity for SMEs under new proposed
E- Commerce Policy-I
•Local Data and focus on creating level playing field- Localization of data
may be good for security issues but its overall impact should not increase the cost of doing
business online for MSMEs.
•Digital Infrastructure
•Increase in Revenue by 51 %M
•Lower Marketing and distribution cost
•Increased in profit margin
•Increased in geographical reach and access
•Shorter time to market
•Improved customer experience
• Single Window Clearance

11. 11
Cross Border Trade and E-commerce in India
•WTO moratorium – Since 1998 members have agreed not to impose
duties on electronic transmissions
•India’s concerns Tax realization and the pretext for unfair mandatory
market access to foreign companies. This will hurt the rapidly growing
domestic e-commerce sector
•Cross-border ecommerce is expected to grow at 25% until 2024, but
the biggest problem is the high shipping fees for customers
•India- EAEU – Though A joint feasibility study (JFS) group has
recommended to include Ecommerce as deliverable but ...
•India- BRICS- Trade between India and BRICs country stands
113.47 Bn*
*Source – Department of Commerce-
Government of India

12. 12
Cross Border Trade : Opportunities for
SMEs
B2C & B2B
B2G
•E-procure –https://eprocure.gov.in/eprocure/app
Can foreign bidders can apply at E-Procure ?
•India 
Yes. Kindly refer to the link DSC for 
foreign 
Bidders under the Downloads
Option which is available in the Home Page. Following the procedure given,
the
 
Foreign 
Bidder / Consultant 
can 
get the 
Indian 
DSC issued and participate
in this
 
eProcurement 
portal without visiting 
India.
•Cross-Border eCommerce is on the rise in India with players like Club Factory,
SheIn, Romwe, Jollychic, Wish and Ali Express attempting to capture the
lucrative Indian e-commerce market, especially in the apparel and accessories
segment.
•Companies like https://www.eunimart.com/, https://inc42.com are helping to
ease the challenges of logistics and higher shipping costs associated with cross
border ecommerce
•B2B eCommerce market in India, leading B2B companies have started to
build their own platforms for small business owners and traders. ( Benefits
for SMEs)

13. 13
Key Recommendations to promote SMEs to benefit
from E- Commerce
•A technology platform which should function as a multi-
dimensional gateway for facilitating MSMEs of all BRICS
countries
•Capacity Building by CII for Russian companies on opportunities
for government tender and how to participate , B2B Interaction

•Sharing of Best Practices – VCs on various sectors

•Champion countries/organizations and build the success on that
•Development of data bank- of E-commerce companies and other
stakeholders for exchange of information among MSMEs of
BRICS countries for business-development, technology transfer,
funding options, exploring joint-ventures and investment
opportunities

14. Views presented in this presentation are personal. It may not reflect the views of CII.
The designations employed, descriptions and classifications of countries, and the presentation of the material do not imply the
expression of any opinion whatsoever on the part of the Confederation of Indian Industry. Though great care has been taken care
of and source of information has been mentioned , The views expressed in this presentation do not necessarily reflect the views of
the CII . The responsibility for opinions expressed rests solely with the presenter. More detail information on sources and additional
materials can be provided on request.
Thank You
Manish Kumar
[email protected]
WhatsApp : [phone]