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Indian Retail Industry Looks For Big Relief In Budget 2023
The Indian E-Commerce industry is expected to grow by 84 per cent to USD 111 billion by 2024, thanks to the pandemic. Industry players say that the union budget 2023-24 may help the sector in a big way
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The Indian retail market is expected to grow to USD 1.5 trillion by 2030, up from USD 0.793 trillion in 2020, due to factors such as urbanisation and income growth. The Indian e-commerce industry, on the other hand, is expected to surpass USD 350 billion by 2030, growing at a Compound annual growth rate (CAGR) of 23 per cent.
The government's measures on technology and digitisation, particularly around innovations, new modes of digital payments/online wallets and the development of local logistics support have been the growth driver for the sector in India.
The Indian E-Commerce industry is expected to grow by 84 per cent to USD 111 billion by 2024, thanks to the pandemic. Similarly, Southeast Asia is on track to grow at a 22 per cent annual rate, reaching USD 146 billion by 2025.
Industry players say that the union budget 2023-24 may help the sector in a big way. “Every year, the budget announcement is awaited majorly for relief measures. The mall sector has undergone one of the most challenging periods owing to the pandemic. The ongoing pandemic has proved that the mall sectors firmly need a catalyst for the revival of the sector,” said Sanjeev Sarin, Senior Centre Director, Phoenix Mills. He added that the main challenge that the sector has faced is due to low footfalls and poor sales. “In these trying times we look forward to a friendly budget for the retail sector," he added.
Talking about the expectations of the sector, Sarin said, “For the revival of the small sector of India, we expect the government to restructure GST formalities, create a national policy on retail among others that will benefit the growth of the sector.” He added, “Consequently the malls will be eyeing a lot from the upcoming Financial Budget. We expect Union Budget 2023 to depict a greater and more sustained push and bring measures in terms of taxes or policies that facilitate consumption.”
On budget expectations, Nisschal Jain, Co-founder and CEO, Shypmax said that the Indian e-commerce logistics sector is expecting some clarity on the de minimis (threshold) value. “Currently the de minimis value for India, for e-commerce import is 0 which means that all orders into India, regardless of value, will often incur GST on their shipments, " Jain said.
Items imported into the United States are subject to duty when the value is over USD 800. In Australia, duty and taxes kick-in after the first USD 1,000. In Canada, it’s USD 20; in some other countries, it’s USD 5. It is evident that individuals will buy more if duties are exempted or reduced, he asserted.
“In the 2022-23 Budget, implementation of a simplified regulatory framework to facilitate export of jewellery through e-commerce was introduced. However, it was limited only through ECCS (Express Cargo Clearance System) at ICT Mumbai, ICT Delhi and ICT Jaipur, according to Central board of Indirect Taxes and Customs (CBIC) SoPs. Stakeholders are awaiting more details on the same from the upcoming budget,” Jain said.
“Additionally, the limit of Rs. 5 lakhs worth of exports via courier under CSB-V, which affects the fine jewellery’s export, is counterproductive and confusing for the e-logistics players as well as the exporters,” he added.
Ankit Agrawal, Director of Mysore Deep Perfumery House (MDPH) and Zed Black hopes that middle class consumers get some relief from this budget. “From this budget, we are hoping for some relief for the middle class, who can buy products without thinking so much about the cost on the wallet. We are also looking for some benefits from the government for the retail and FMCG sector which will help us grow our exports and sales,” he said
Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances said that a lower GST on consumer appliances will go a long way both for the industry and the consumers.
“Large Appliances industry suffers from continued low penetration levels in India despite the positive impact on the quality of life and productivity. Further, last year saw stagnation in the high-volume mass segments due to prevailing economic conditions and low consumer sentiment among the middle class apart from continued cost impact to the industry due to commodity, currency, and regulatory norms. Given this context, a lower GST on appliances will help. Government should also consider larger stimulus to middle class to induce spends and lift overall economy which will benefit multiple sectors. A strong component eco system will help the industry. We have proposed changes in basic custom duty for different components. We also recommend zero duty under IGCR for all inputs (components and commodities) used in manufacture of parts such as motor, compressor, timer etc. Additionally, for refrigerators, imposing non-tariff barriers on FG imports is recommended, like in AC,” Nandi said.