Budget 2024 Proposes Removal of Courier Export Cap to Fuel E-commerce Growth
In a significant move aimed at accelerating the growth of e-commerce exports from India, the Union Budget has proposed to eliminate the existing value cap of Rs 10 lakh per consignment on courier exports. This strategic decision is expected to empower a multitude of startups and small to medium enterprises (SMEs) to expand their reach to international markets more effectively.
Enabling High-Value D2C Exports and Streamlining Processes
Vinod Kumar, President of the India SME Forum, highlighted that this change will make high-value direct-to-consumer (D2C) exports viable and expedite clearance procedures. "It removes procedural landmines that have historically kept small sellers out of the global e-commerce arena. With this move, India becomes more competitive against countries like China and Vietnam in the cross-border D2C space," Kumar stated. Exporters will now have the flexibility to ship fewer, higher-value parcels instead of splitting consignments to adhere to the previous cap.
Improving Handling of Rejected and Returned Consignments
The budget also includes proposals to enhance the handling of rejected and returned consignments through the use of advanced technology for identification. This initiative is designed to reduce the apprehension associated with returns and facilitate faster turnaround times. Kartikeya Prakash, Partner at Khaitan & Co, emphasized the impact on cash cycles and customer experience. "It directly affects cash cycles and customer experience for D2C brands and SME exporters. If implementation is predictable and time-bound, this can meaningfully improve ease of doing business and export competitiveness for startups," he explained.
Government's Focus on E-commerce Export Potential
The government has been intensifying its focus on e-commerce exports, with estimates suggesting the sector has the potential to reach $200 to $300 billion by 2030. Platforms such as Amazon have already enabled numerous Indian small sellers to establish an online presence and sell globally. Tanmay Kumar, CFO at logistics startup Shiprocket, noted that the removal of the courier export cap will allow smaller sellers to scale international shipments without artificial thresholds, thereby making cross-border e-commerce more accessible.
Benefits for Exporters and Economic Implications
Harpreet Singh, Partner at Deloitte India, pointed out that exporters can now send higher-value consignments without incurring additional paperwork or costs. Sujata Biswas, Co-founder at Suta, added, "While it doesn't increase demand, it clearly improves the ease and economics of global expansion. This enables us to potentially work out a better way to pass the benefits to the customers." The overall initiative is poised to enhance India's export competitiveness and support the growth of the startup ecosystem by simplifying cross-border trade processes.
