New Delhi. Director General of Foreign Trade Santosh Kumar Sarangi said on Friday that the e-commerce industry has suggested the government to allow foreign direct investment (FDI) in the ‘inventory’ based model of online business only for export purposes.
In the ‘inventory based model’, companies operating online keep their own goods and sell them directly to customers. Under the country’s current FDI policy, foreign direct investment is not allowed in the ‘inventory-based model’ of e-commerce. This is allowed only in companies that are operating through the ‘market place’ model.
Sarangi said that the government is working at many levels to promote exports through e-commerce. He said that various parties associated with e-commerce have requested the Department for Promotion of Industry and Internal Trade (DPIIT) to reconsider the FDI policy in this context.
“If these rules can be revisited for export purposes, we are requesting DPIIT to consider the same,” the Director General of Foreign Trade said at a conference on e-commerce organized by industry body FICCI. This can be an important step towards creating an e-commerce export sector.
DGFT and its team are working on this.” Regarding the steps being taken to promote exports through e-commerce, he said that many of these exporters come under the mandatory GST regime.
There are also small exporters in this. That is why the Directorate General is working with the Department of Revenue to see if there can be a scheme like ‘composition’ fee scheme for small companies. So that this mandatory GST can be waived up to a certain limit of export value. Sarangi said, “Similarly, exports through e-commerce are often not getting benefits like duty drawback or Rebate of Duties and Taxes on Export Products (RoDTEP) or Rebate of State and Central Taxes and Duties (RoSCTL).” .
”That’s why we are now working with the Express Cargo Clearance System (ECCS) and export postal bills,” he said. So as to ensure that the shipping bill flows straight. With this, such exports should also come under the scope of exemption schemes.
Sarangi said the DGFT is also working with the Department of Posts to ensure that the Postal Export Centers and Foreign Post Offices (FPOs) are strong and spread far and wide.
The postal department has a target of opening 1,000 such centres. Also, the departments are trying to ensure that the export consignment reaches the destination as soon as possible. He said the department is working with postal services of other countries, including the US, to provide complete online tracking system for e-commerce export consignments.
