(MENAFN- KNN India)
New Delhi, Nov 14 (KNN) As India strides toward becoming the world's third-largest Economy by FY28, the nation's economic landscape is undergoing significant transformation.
A NITI Aayog report highlights the growing role of micro, small, and medium enterprises (MSMEs) in the digital economy, with e-commerce acting as a key enabler for their growth.
Startups and large enterprises are driving innovation, while MSMEs are embracing digitisation to enhance market access and improve cost-efficiency in their operations.
E-commerce has emerged as a crucial platform, allowing even small artisans to reach global customers. Industry data shows that India's e-commerce market is set to grow at a robust annual rate over the next five years, with MSMEs expected to be the primary beneficiaries of this expansion.
By providing greater market access, reducing costs, and streamlining supply chains, e-commerce is helping MSMEs overcome traditional barriers to entry.
However, the NITI Aayog report also underscores that the proportion of MSMEs leveraging e-commerce remains low compared to the broader manufacturing base in India.
Despite these opportunities, MSMEs face several challenges in fully capitalising on the potential of e-commerce. The volume of e-commerce exports from Indian MSMEs is currently estimated at around USD 2 billion annually, far below the sector's potential, according to the Global Trade Research Initiative.
These obstacles highlight the need for greater integration of MSMEs into global supply chains, as advocated by the NITI Aayog report, which emphasises the importance of expanding MSME participation in international markets.
While the government has taken steps to facilitate digital adoption among MSMEs, such as the 2023 Goods and Services Tax (GST) waiver for e-commerce sellers with revenues up to Rs 40 lakh, the regulations remain fragmented.
The waiver only applies to single-state sales, limiting the reach of MSMEs who want to expand beyond their local markets.
The requirement for separate GST registrations in each state, along with the new biometric verification mandate, creates unnecessary complexity and hinders interstate expansion.
A more unified approach, such as a“Single Home State GST Registration” that is valid across all states, would reduce the compliance burden and align with the government's broader goals of digitisation.
Additionally, simplifying export compliances and reducing barriers like quality certifications and import duties would ease the path for MSMEs to participate in global e-commerce.
The future of e-commerce in India depends on creating an enabling environment that fosters innovation and growth among MSMEs.
By prioritising capacity-building initiatives, simplifying regulatory processes, and promoting digital adoption, India can unlock the full potential of e-commerce to elevate MSMEs, stimulate economic growth, and position the country as a global leader in the digital economy.
(KNN Bureau)
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