Professional Documents
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DOCUMENTATION
IMPROVEMENT ASSIGNMENT
Under current trends, retailers in categories such as fashion, jewellery and home products are
looking at omnichannel or digital design stores. This has been exacerbated in the post covid world,
which has increased its demand for the online availability of these goods.
Modern Trade stores alongside traditional brick and mortar stores will increase their shares from 8%
to 10% over the next 5 years, generating a market of $113 billion.
Last year, the CEO of Amazon Inc. Jeff Bezos said his company would export 'Make in India' products
worth $ 10 billion by 2025. Amazon India has so far supported $ 2 billion in exports to this mission.
As per UNCTAD’s e-Trade Readiness Assessment, 27 of the least developed countries were found to
have gaps and barriers in key policy areas. These ranged from the legal frameworks present and lack
of ICT infrastructure to payment setups and the skills of the workers.
Establishing an e-commerce value chain requires setting up of services such as distribution centres,
payment gateways, warehouses, drivers and vehicles. These in turn require heavy investment in
management, IT and overall business skills.
Overcoming these challenges requires effective government policies, which are used for close
dialogue in the private sector. Stakeholders of the assessment have emphasized the need for
inclusive and comprehensive national development strategies in commerce as a priority for planning
policies and legal reforms, partnering with the private sector and helping to secure additional
support for development partners.
III. EMERGING CHALLENGES TO GROWTH OF INTERNATIONAL TRADE THROUGH
E-COMMERCE
Following are the restrictions and emerging issues highlighted by the United States Trade
Representative’s annual National Trade Estimate Report on Foreign Trade Barriers:
a) Market Access:
• Investment restriction in E-Commerce website ownership, limits on the ability of the
platforms to operate, restriction in the nature and amounts of goods that can be sold
through E Commerce platforms act as a major Barrier to the growth of such platforms. Also,
regulatory burden placed on the platforms such as labelling restrictions on certain goods like
medicines make it costly to operate such platforms.
• E.g., India’s prohibition of Foreign Investment in Business to Consumer (inventory based) E
Commerce.
b) Localization:
• Certain countries require the Companies to have physical presence, local server locations,
domain names and representatives. This adds to increased costs and increases the gestation
period for these companies.
• E.g., Indonesia’s recent draft legislation requires the E-Commerce operators to register with
the Government. Algeria on the other hand requires registration as well using local data
centers.
c) Data Localization:
• The restriction flow of data between countries impedes the operations of multinational
ecommerce, limits their product and service offerings like payments processing, shipment
tracking, document processing etc. Movement restrictions on customer data further
impedes data processing abilities of the operators.
• E.g., China restricts cross border data transfer. The European Union imposes extensive data
protection requirements on the companies dealing in Goods and services via Electronic
commerce in the EU.
d) E-Payments:
• Limiting access to electronic payments services, such as credit cards, restricts the financing
options the buyers have for purchases.
• Example – In South Korea International E commerce brands cannot accept payments
through local Korean branded credit cards.
What we need to infer from the above is that the global trade of goods is going to be driven by
Electronic Commerce hence the systems pertaining to the documentation, procedures, and trade
agreements to facilitate the same.
a) WTO Rules
• The WTO rules do include provisions for obligations, transparency and nondiscrimination. In
1998 WTO had agreed to a temporary moratorium on the payment of customs duty. The
WTO Technology agreement signed by 54 members also eliminates tariffs on many IT
products which are an integral part of E Commerce.
b) Trade Facilitation Agreement
• The trade facilitation agreement launched after the Bali Ministerial talks in 2013 brought
about a framework to reduce trade cost by modernizing the and speeding up customs
processes. The Agreement aims to reduce cost by 14.3% or USD 1 trillion per year. E
commerce is the key to bring about the changes this agreement envisages.
c) E Commerce Plurilateral
• The agreement is under negotiation with 80 members taking part in the discussions. The
agreement aims to bring about a common set of rules that shall streamline ecommerce and
digital trade throughout the world.
• Multiple agenda points, however hold back the agreement such as US’s insistence of
permanently reinstating the moratorium while developing countries are trying to facilitate
ease of operations and clearances.
• One major hurdle is that India has opted out of this agreement.
VI. NATIONAL E-COMMERCE POLICY (DRAFT) – PROPOSALS FOR TRADE
The national E Commerce policy envisages streamlining all aspects of E Commerce in India. Within
this many policy hurdles have been proposed-
• India post will be the anchoring body to negotiate the pricing with international carriers on
behalf of the MSMEs and Start ups
• Elimination of fees for availing the export benefits and doing away with Bank realization
Certificate charges and providing access to the Export Processing and Monitoring Systems.
• Discouraging capital dumping and purging non-compliant apps, making clearance through
customs compulsory.
• Mandatory Indian presence for the ecommerce sites with a nominal representative
• Sites displaying INR must ensure MRP is printed on the package of the products as well.
• Payment through bank transfer and payment gateways to non-compliant sites/apps to be
banned.
• Increase of existing cap of Rs 25000 for courier exports
• It’s proposed that RBI that require Postal bill of exports against payment transaction
reference number or consignment number to be done away with.
• Implementing EDI mode at Courier terminals so that the export process including reduction
of documentation at Air Freight Stations fast tracked.
• With the aim of reducing congestion following has been put forward - setting up AFS for
cargo preparation and documentation. Only flight ready cargo to move to airport from AFS.
Implementing measures which improve the efficiency of transactions and cater to SMEs and smaller
businesses as well became an important need to be addressed. These measures can include a
simpler declarations regime for smaller sellers to aid in faster movement of goods & cheaper and
easier access to providing certificate of origin. As a result of the boom in e-commerce and number of
small size sellers and buyers, Several governments and customs unions have worked to address the
above concerns and designed systems to cater to their needs. Some examples include:
In 1999, Brazil introduced simplified customs measures for items under a particular weight and
value. This system proved to be successful, leading to an increase in the number of exporters to the
tune of 11,000 and shipments by approximately 120,000. Under this same system, value of exports
was US$272,000,000 in 2012.
b. RETURNS
The sale/purchase of goods makes up the major portion of modern-day e-commerce. However,
another significant aspect is related to the return of goods. With some sellers having to process sales
returns up to 1/3rd of their actual sales, the simplification of returns procedures has become
essential for e-commerce companies to generate a profit. Many companies choose to not collect
returned goods as it becomes uneconomical for them. As an example, sellers in Turkey have to bear
all the costs incurred when an item is returned, which becomes expensive without expedited
procedures and exemptions. Streamlining procedures and applying 0 duty on returns, such as the
one provided by Swedish Customs, is a suggested solution.
c. CERTIFICATES OF ORIGIN
Regulations around Certificates of Origin can represent significant financial outlay and effort for
SMEs, whose consignments and may have to ship their goods to a more varied number of countries.
The only option remaining for such traders may be to establish bonded warehouses in the countries
to which they are exporting. This allows them to circumvent documentary regulations but represents
a separate cost altogether. The access to markets is thus severely restricted. Tools like self-
certification and e-certification have been implemented by several countries to streamline the
process of obtaining origin certificates and to make the process more cost efficient.
VIII. BIBLIOGRAPHY
• http://documents1.worldbank.org/curated/en/645791578285992456/pdf/Facilitating-
Trade-and-Logistics-for-E-Commerce-Building-Blocks-Challenges-and-Ways-Forward.pdf
• https://www.pwc.in/assets/pdfs/news-alert-
tax/2019/pwc_news_alert_26_february_2019_national_ecommerce_policy_draft.pdf
• http://documents1.worldbank.org/curated/en/645791578285992456/pdf/Facilitating-
Trade-and-Logistics-for-E-Commerce-Building-Blocks-Challenges-and-Ways-Forward.pdf
• https://www.bigcommerce.com/blog/cross-border-ecommerce-checklist/
• https://logistics.shiprocket.in/indian-ecommerce-to-contribute-8-to-retail-trade/
• https://unctad.org/news/intricacies-impact-and-opportunities-e-commerce-trade-and-
development