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Ecommerce is going to be the mantra for unleashing the potential of MSMEs in India: Ministry of MSME

Federation of Indian Micro and Small and Medium Enterprises (FISME) hosted the “National Workshop on Growth of Retail & E-commerce in India” to identify the policy obstacles in the way of small businesses and retailers in joining digital retail and e-commerce.

The consultation was attended by 40+ delegates representing MSMEs, think tanks, payment service providers, e-commerce and last-mile delivery platforms, and industry organizations such as Amazon, Meesho, Zomato, BlinkIt, PayU, Shiprocket, among others. This was aimed at providing constructive recommendations to the government on how offline and online channels can complement each other to embark on a new era for retail 4.0.

One of the reasons for this is the multiplicity of regulations for online platforms, creating an overlap of rules and casting a sense of regulatory uncertainty on the entire ecosystem. There is also a lack of parity between the regulatory requirements for online and offline sellers, burdening online sellers with additional compliance obligations, such as the disclosure of the country of origin for their goods and services, ensuring the authenticity of imported products, and providing a comprehensive breakdown of product charges.

Rajneesh, Additional Secretary & DC, MSME, Ministry of MSME said in a statement, "India is an aspirational country - we are on our way to becoming a $5 trillion economy and will soon also be $10 trillion economy. This won't be possible by only relying on traditional ways of businesses. E-commerce is a disruptive force for unleashing the potential of MSMEs in India. We, at the government, realise the relevance and importance of e-commerce. We are in line with the recommendations shared by FISME and the MSME representatives present today. We are committed to digitise businesses so that they can recognise the true value of e-commerce in growing their business and contributing to the the economy at large."

GST parity - One of the reasons for low digital penetration are the complex GST compliance requirements needed to make the transition from offline to online selling platforms. Presently, it is mandatory for online businesses to register under GST regardless of turnover. However, for offline sellers, it only applies to businesses with a turnover of over Rs 40 lakhs. This creates an unequal playing field between offline and online retail.