This can turn India’s small exporters into global players.

By Ravishankar Kalyanasundaram

A quiet headline in the Economic Times may prove historic: “Govt considers revamping e-commerce export rules for SMEs.” At first glance it looks routine, but it could be the reform that finally unleashes India’s MSMEs — the millions of small and medium enterprises that employ, innovate, and create, yet falter when they try to export.

The Stranglehold

For decades, MSMEs haven’t lacked demand; they’ve lacked oxygen. Take a simple case: Stella in New York wants to buy a Kanchipuram saree from Srinivas Pattu Centre. Can she click on Amazon and order one directly? Not really. Under today’s rules, Amazon is not allowed to hold inventory for export. Srinivas would have to manage the sale himself — packaging, customs clearances, GST refund paperwork, bank settlements, shipping. Each step is a choke point. Customs crawls, banks demand collateral, ports wave through large containers but not small parcels. For Stella, the saree is out of reach; for Srinivas, the sale is too costly to attempt.

The Treasure Chest

This is what changes with the new playbook. Amazon (or Walmart, Flipkart, eBay) will be allowed to buy sarees from Srinivas upfront, stock them in its export warehouse, and act as the exporter of record. When Stella clicks “buy,” Amazon ships the saree directly from India to New York. For Srinivas, there is no need to find an American buyer or navigate red tape — he simply sells to Amazon in rupees, as if selling to a wholesaler. For Amazon, the responsibility is to handle customs, shipping, forex settlements, and claim export-linked benefits.

So while Amazon gets the exporter’s incentives, Srinivas gets what he always wanted but could never manage: a steady offtake, a global runway, and freedom from paperwork. One click, and the saree moves from a Tamil Nadu loom to a Manhattan living room. Multiply this across millions of Stellas and millions of Srinivases — sarees, snacks, handicrafts, furniture, spices — and suddenly the bazaar of India opens to the world, just like buying on Amazon in India today.

This could trigger a wave. India’s handicraft exports already fetch over $4 billion annually from carpets, pottery, and handwork. Yet this barely scratches global demand. Contrast it with China’s Yiwu market, which alone handles trade worth over $30 billion a year, much of it in the very categories Indian artisans excel in. With aggregation and e-commerce-led visibility, India’s artisans could multiply their reach several times over.

Success Stories We Know

The most dramatic story is Haldiram’s: what began as a small namkeen shop in Bikaner is now a global snack empire, valued at over ₹80,000 crore ($10 billion), with bhujia and soan papdi sold from New Jersey to Nairobi. But India is not short of Haldirams-in-the-making. From banana chips in Kerala to chaklis in Gujarat, pickles in Andhra and laddus in Tamil Nadu — thousands of small and medium snack makers exist across the country. If policy enables every one of them to place their products on Amazon’s global shelves, what Haldiram’s achieved in decades could become a widespread reality — where a buyer in New York or Nairobi orders Indian snacks as easily as ordering a pizza.

Craft and textiles tell the same tale. FabIndia stitched together rural weavers with urban markets and now exports a lifestyle of Indian craft. Tirupur, once a sleepy Tamil Nadu cluster, quietly supplies T-shirts to Berlin and Boston. If these could succeed despite hurdles, what might happen when red tape gives way to digital platforms and seamless logistics?

The Global Benchmark

India is, in fact, late to this party. China has long allowed e-commerce giants like Alibaba and JD.com to act as exporters, holding inventory on behalf of millions of small producers. Cross-border e-commerce sales from China now exceed $150 billion annually, feeding demand from the U.S., Europe, and Southeast Asia. The model is simple: sellers deliver goods to an Alibaba hub, and the platform takes over as exporter of record — managing customs, logistics, and payments. Even smaller economies like Vietnam and Indonesia have adopted similar approaches, encouraging foreign platforms to build inventory-based export models for local SMEs. India’s new playbook would be its first serious step in this direction, benchmarking against proven models that already dominate global trade flows.

Why the New Model Matters

That is the promise of the government’s new inventory-based export model. Until now, e-commerce platforms couldn’t hold inventory, leaving MSMEs stranded. Under the new system, platforms will be able to aggregate goods under one roof and manage the export chain end-to-end.

For the buyer in New York, it’s no longer a risky purchase from an unknown artisan. It is Amazon-fulfilled, Walmart-certified, eBay-delivered. Just as crucial, these platforms will showcase Indian MSME products on their global storefronts — giving artisans the visibility they always longed for. The artisan gets paid in rupees, free from paperwork. And India not only gains export scale but also the dollar inflows fronted by global giants — a stabilising force for the economy and a boost to its global trade standing.

The Logistics Reimagined

The export chain itself is restructured. First-mile trucking brings goods to shared hubs. Sorting and packaging bays prepare them. Digital corridors move them through customs. Containers sail abroad with economies of volume.

For the small producer, this is freedom from paperwork. For India, it is a chance to scale exports the way we scaled software — by letting talent do what it does best and leaving the rest to infrastructure.

What Government Must Do

Policy must match ambition. Customs must restrain its procedural appetite. SEZs and FTWZs should be repurposed into MSME export hubs. Financing should flow easily. But more than that, government must incentivize logistics companies to build infrastructure that showcases MSME products region by region. If India can fund Smart Cities with big budgets, why not create MSME showrooms and export bazaars with the same vision?

The world has done this before. Yiwu in China, often called the “supermarket of the world,” hosts over 70,000 stalls under one roof, feeding orders to every continent. Dragon Mart in Dubai spreads across 1.2 million square metres, a permanent trade fair for Chinese MSMEs. India has no equivalent today — but with timely investment, it could create its own regional bazaars, integrated with e-commerce, and become the true marketplace of the world.

The Unsung Backbone

MSMEs are the backbone of India’s economy. They employ over 110 million people — second only to agriculture — and contribute nearly half of India’s exports. Yet they have long been stifled by red tape, invisible in global markets and excluded from the growth story they help to write.

This single policy shift can do three things at once:

• Give artisans, weavers, and small manufacturers the visibility on global platforms they have always longed for.
• Unlock steady dollar inflows, fronted by the credibility and capital of e-commerce giants.
• Provide the long-needed support to millions of small businesses struggling against paperwork and procedural choke points.

If implemented earnestly, this reform can be the catalyst for India’s MSMEs to finally claim their rightful place in the global bazaar — not just prospering their own businesses, but progressing the country.

When the weaver in Salem, the snack maker in Surat, the potter in Jaipur, and the embroidery unit in Lucknow can sell worldwide with one click, India’s growth story will no longer be told only in boardrooms. It will be stitched, carved, cooked, and painted across every lane of the country.