The Directorate General of Foreign Trade (DGFT) under the aegis of Ministry of Commerce & Industry of India, has issued Trade Notice No. 26/2023-24, encouraging all E-Commerce Exporters to avail themselves of Pre-shipment and Post-shipment Export Credit and Packing Credit in Foreign Currency (PCFC).
The policy move is expected to fuel a significant e-commerce boom in India, enabling exporters to access financial resources that are crucial for facilitating international trade in the digital age.
The recently introduced Foreign Trade Policy 2023 emphasises the need to address issues related to exports through E-Commerce, one of which is the absence of specialised credit facilities for this rapidly growing sector. To address this concern, the DGFT initiated consultations with industry representatives, exporters, and relevant government departments. These discussions highlighted the need for accessible Pre-shipment and Post-shipment export credit for E-Commerce exports.
In response to these consultations, the DGFT engaged with the Reserve Bank of India (RBI) to explore possible solutions. The RBI’s “Master Circular-Rupee / Foreign Currency Export Credit and Customer Service to Exporters” was found to offer a comprehensive framework that allows access to Pre-shipment and Post-shipment export credit and Packing Credit in Foreign Currency (PCFC) for all eligible exporters, including E-Commerce Exporters.
The Trade Notice encourages banking and financial institutions to extend Pre-shipment and Post-shipment Export Credit and Packing Credit Loan in Foreign Currency (PCFC) to E-Commerce exporters in line with the existing guidelines established by the RBI. It further emphasises that any issues faced by E-Commerce Exporters or banks in availing such Export Credit should be promptly brought to the attention of the DGFT.
The announcement reflects the Indian government’s commitment to facilitate a conducive environment for E-Commerce exports, ultimately contributing to the growth of the country’s digital economy.