Commerce ministry suggests banks to provide export credit in foreign currency to e-commerce exporters

The commerce ministry’s arm DGFT on Monday said it has suggested banking and financial institutions to extend pre- and post-shipment export credit in foreign currency to e-commerce exporters based on the guidelines of the RBI.

Any issues in availing such credit may be brought to attention by e-commerce exporters or banks to the directorate general of foreign trade (DGFT).

This assumes significance as the new Foreign Trade Policy 2023 is also aimed at promoting exports through the e-commerce medium.

The DGFT in a trade notice said that consultations were held with industry representatives, exporters, and nodal departments on outstanding issues pertaining to exports through e-commerce.

One issue flagged was the unavailability of pre-shipment and post-shipment export credit for e-commerce exports and in this regard, consultations were held with the RBI, it said.

It is clarified that master circular ‘Rupee/Foreign Currency Export Credit and Customer Service to Exporters’ furnishes a comprehensive framework, and permits for access to pre-shipment and post-shipment export credit and Packing Credit in Foreign Currency (PCFC) to all eligible exporters which does not preclude e-commerce exporters.

”Banking and financial institutions concerned are therefore encouraged to extend pre-shipment and post-shipment Export Credit and Packing PCFC to e-commerce exports based on the extant guidelines issued by RBI,” it added.

The Foreign Trade Policy 2023 has also mandated to handhold and conduct outreach programmes to promote e-commerce exports.

Think tank Global Trade Research Initiative (GTRI) in its report has stated that India should target USD 350 billion worth of goods exports through e-commerce by 2030 and for that the government needs to address pain points of the sector by taking steps like formulating a separate policy.

India’s current e-commerce export numbers remain far below their potential. Currently, e-commerce exports account for only USD 2 billion, less than 0.5 per cent of the country’s total goods export basket.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Credit in Foreign Currency

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