Streamlined sales for SPEZAs; electronic commerce stockpile
The Indian government is planning to reform its Special Economic Zone (SEZ) policy in a bid to enhance export competitiveness and create opportunities for domestic sales.
One of the key changes being considered is the introduction of an inventory-based e-commerce model for exports. This move is expected to ease the burden on micro, small, and medium enterprises (MSMEs) by allowing them to focus on quality and branding, rather than getting bogged down by complex logistics and GST refunds.
The reform also includes the selection of DHL, Go Glocal, and Lexship to run pilots for e-commerce export hubs. These hubs aim to simplify return logistics, ease inter-state movement, and provide seamless GST refunds.
The reforms are not limited to e-commerce. The government is also considering steps to ease liquidity, prevent insolvencies, and allow exporters to sustain operations until new markets are tapped.
In the previous financial year, the US was the biggest market for goods exported from SEZs, with exports of $15.2 billion. Around 60% of carpets, 50% of made-ups, 30% of gems and jewellery, and 40% of apparel exports were destined for the USA. Goods exports from SEZs to the US grew 20% on year to $15.2 billion in the same period. However, the 50% tariff imposed by the U.S. is causing a risk of decline in orders for SEZs that contribute significantly to labor-intensive exports.
The total exports from SEZs in 2024-25 were $176.6 billion, with SEZs exporting a wide range of goods including drugs and pharma ($4.07 billion), petroleum products ($3.5 billion), gems and jewellery ($3.3 billion), engineering goods ($1.94 billion), and chemicals ($708 million).
Royal Enfield's Siddhartha Lal has warned against a split Goods and Services Tax (GST) on bikes, stating that a uniform 18% GST on all two-wheelers is critical.
The government is also considering reforms in the GST to alleviate the pain of exporters. The reforms are expected to reduce the amount locked in inputs costs for exporters, making it easier for them to compete in the global market.
The reforms are a positive step towards creating a more conducive environment for exporters, enabling them to focus on quality and branding, and ultimately boosting India's exports.
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