FTP gives e-tailers reason to cheer

Govt provides incentives to e-commerce companies exporting products from sectors that create jobs; eBay India head says policy will provide a filip

For the e-commerce sector, struggling with regulatory and taxation challenges, the central government's new five-year Foreign Trade Policy (FTP) is reason to cheer.

Among other things, the policy talks of incentives to companies exporting products from sectors that create jobs.

“We are extremely pleased with the FTP. The policy is a recognition of the contribution to the exchequer made by small-time retailers and small and medium enterprises which export via e-commerce,” said Latif Nathani, vice-president and managing director, eBay India.

“The policy will provide a fillip to such retailers, as they will not only be able to ship small consignments via courier but reduce their burden on transaction costs. With a focus on handloom products, the guidelines will also boost the Make in India campaign.”

eBay India has about 15,000 e-commerce sellers that use its platform to sell in 206 countries. Mainly, two new schemes -- Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) -- launched by the government under the new FTP (2015-20) will benefit Indian e-tailers, experts said.

Under MEIS, companies exporting goods through the foreign post office or couriers using e-commerce of a freight on board (FoB) value up to Rs 25,000 per consignment will be entitled for rewards.

The objective of MEIS is to offset infrastructure inefficiencies and associated costs in export of goods, especially those having high export intensity, employment potential and able to enhance our export competitiveness.

If the value of exports using an e-commerce platform is more than Rs 25,000 per consignment, the MEIS reward would be limited to an FoB value of Rs 25,000.

The goods entitled for benefit under the scheme are handlooms, books & periodicals, leather footwear, toys and customised fashion garments.

“Export of such goods under courier regulations shall be allowed manually on a pilot basis through airports at New Delhi, Mumbai and Chennai... Department of Revenue shall fast-track the implementation of EDI mode at courier terminals,” the policy said.

Amit Kumar Sarkar, partner at Grant Thornton India LLP, said: “The government has taken a long time to introduce the new FTP, which with the promises made in the Union Budget finally provides the specific fiscal support India Inc was asking for. The simplified fiscal incentives proposed in the FTP (particularly the merged MEIS and SEIS schemes), coupled with the administrative reliefs on import and export of goods and services, should serve to underscore the intention of the Government to meet its Make in India slogan.”

He added it was now for the other ministries (finance, in particular) to support the FTP by issuing the required notifications.