How Government Is Trying To Push MSME Products On E-commerce Platforms

Indian government is considering fee-based arrangements with Amazon and Flipkart to boost sales of MSME products
How Government Is Trying To Push MSME Products On E-commerce Platforms
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The central government is looking to increase the sale of products manufactured  by MSMEs and leveraging the popularity of e-commerce giants such as Flipkart and Amazon among others. According to media reports, the government is considering fee-based arrangements with Amazon and Flipkart to boost sales of MSME products.

According to an ET report, after having an internal discussion, it was decided to pay the e-commerce giants for listing these products on their platform. A part of the fee will have to be refunded in case the sellers delists itself from the platform after six months. 

The report also revealed that this move comes as a replacement for the original plan of launching a separate e-commerce platform for MSME sellers. Government e-marketplace (GeM) had advised against this move and had suggested to include the private players for this.

How Will This Move Help?

With this agreement, MSMEs will be able to switch the digital platform and also enter the growing e-commerce segment. According to a 2019 report by EY, the Indian e-commerce sector is expected to reach $200 Bn by 2027 and is considered as a significant avenue for providing employment and build micro-entrepreneurship in the country. The report also revealed that, seven companies in the sector entered the unicorn club in 2018.

Apart from this, the move will also help Amazon and Flipkart to tap into the rural market. In August it was reported that, Amazon launched Amazon Karigar. This store offers a wide range of authentic crafts from Indian artisans. Similarly, Flipkart launched Samarth in order to offer products made by Indian artisans, weavers and handicraft producers.

What Happened To Government’s Bharat Craft 

Earlier in August, minister of micro, small and medium enterprises, Nitin Gadkari, had said that Centre government was working on an online marketplace, called Bharat Craft.  According to reports, this platform was aimed at directly connecting MSME sellers with customers. 

Gadkari also believed that the portal could bring in turnover of around INR 10 lakh Cr within the next two to three years.

However, government e-marketplace (GeM) had advised against this move and had suggested to include the private players for this.

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