consumer in India And the world over switched to online commerce portals to purchase products ranging from basic daily needs to branded goods. E-commerce as an industry has not only gained momentum due to COVID-19, but India has seen a spurt in growth even before the pandemic hit the masses.
Factors such as improvement in logistics network of e-commerce platforms in Tier 2 cities and beyond have led to expansion of online marketplaces, thereby increasing the demand for online shopping.
As Budget 2023 is being presented by Finance Minister Nirmala Sitharaman a day later on February 1, the industry is also seeking some announcements that are expected to help the sector and the economy.
Vidit Atreya, Founder & CEO, Meesho said, “Budget 2023 presents an opportunity for our government to put our MSMEs in the fast lane based on its proactive efforts to transform the small business economy. First, the government can enhance working capital for e-commerce suppliers by reducing GST on input services such as logistics and facilitating refund of accumulated input tax credit. In April-November 2022, ~2.9 lakh sellers on Meesho dealt in products that attract <18% GST and accumulated input tax credit of Rs 265 crore.”
Second, expediting the implementation of GST exemption norms for small online businesses to help them realize their full potential.
Atre said that with the National Logistics Policy reducing costs for the ecosystem and strengthening the delivery network, “the government can leverage India Post’s unmatched reach and Indian Rail To help our MSMEs meet the growing demand for e-commerce from small towns and villages in a fast and reliable manner, thereby boosting their competitiveness.”
Sahil Goyal, Co-founder and CEO, Shiprocket, highlighted that in order to realize the dream of $5 trillion GDP, it is important to double down on digital infrastructure.
Goyal also urged that the budget should be centered around digitization initiatives that will empower the MSME sector.
Goyal said the impact generated will be felt in better urban and rural mobility as we see more ports, roads, airports and other infrastructure being developed.
“This will result in reducing the logistics cost – from around 13-14% of GDP to 8%. The ultimate goal would be to mark India’s presence among the top 25 countries with the best Logistics Performance Index (LPI),” Goyal said.
Ramesh Jhajharia, Co-founder and CEO, Tradexa, elaborated on the need to recognize that the Indian e-commerce industry is reeling from the shock of the pandemic.
Jhajharia suggested that there is a need to provide additional financing opportunities at affordable interest rates.
The government can also enhance working capital for e-commerce suppliers by reducing GST on input services such as logistics and facilitating refund of accumulated input tax credit. Expediting the implementation of GST exemption norms for small online businesses to help them realize their full potential.
“Tax cuts or incentives for investment in technology and infrastructure for D2C brands and retailers is another area that needs attention from the Union Budget,” Jhajharia urged.
Jhajharia said the Budget 2023 should prioritize reforms to improve the process of business operations for the MSME sector and address competition to level the playing field for small and medium enterprises against e-commerce giants needed.
“The current measures are not effective as all internal information, tools and strategy are shared only with selected partners. We also expect the government to impose taxes for D2C brands or retailers on sales through their own web stores. There is an urgent need to come up with policies to enhance profitability. There is also an urgent need to implement policies that reduce input costs, increase liquidity, promote financial inclusion and by offering affordable financial products to small firms. Startups are allowed to carry forward losses.
Ajoy Thomas, Vice President and Business Head (Retail, E-commerce, Logistics and Transportation), TeamLease Services, believes that the e-commerce industry in India is poised to achieve substantial growth owing to the rapid rise in internet user penetration and higher growth. Has been successful. Demand for easy access to goods and services among consumers from all walks of life.
“The e-commerce sector should look for incentives in the upcoming budget to encourage digitization and digital transactions. I also hope that the government will cut the corporate tax rate to promote development.
According to an analysis by Grant Thornton, e-commerce in India continues to grow, with a total market size expected to reach $188 billion by 2025 with 974 million internet users, 220 million online shoppers.
The rise of e-commerce has also been a boon for allied sectors, with digital payments in particular getting a big push. A KPMG analysis states that cash-based transactions have gradually given way to their online counterparts, with cards becoming the most preferred payment method for online purchases.
read all latest business news Here