India makes around 1,400 million kg (mkg) of tea and exports 250 mkg to around 100 countries. It is an atmanirbhar industry — only exports and insignificant imports. However, all activities are in physical mode. The concept of cross-border e-commerce is yet to catch up in the Indian tea sector.

Cross-border e-commerce (CBEC) involves buying or selling of products via online shopping channels across national borders. There are many advantages in e-business and tea exporters — big, medium or small — need to explore this and reap benefits.

In recent years, cross-border e-commerce has risen to become a major force in B2B and B2C businesses across the globe. The total value of all global CBEC touched around $2 trillion in 2021 and is expected to cross $4 trillion in the next 4-5 years (increasing at a CAGR of around 27 per cent) — almost twice as fast as domestic e-commerce. Even a 1 per cent market share comes to $40 billion of exports for India.

Indian exporters who are pursing CBEC are still looking at this channel as a fringe export business, unlike China which has been pushing this export tool for over a decade. Growing at 30 per cent annually, China now accounts for 50 per cent of the total global e-comm market.

It has already put a proactive policy framework in place to promote CBEC in the RCEP region to reap more benefits. Other countries prominent in this e-comm space include the US, Japan, Korea, Malaysia and Thailand.

E-commerce, which was growing at a fast pace prior to Covid-19, has accelerated further since the pandemic . This has also been possible due to the high de minimis duty threshold, by which imports are duty-free if they fall below a certain annual threshold limit — for example, $800 in the US, $177 in the EU and $3,782 in China.

CBEC is largely free from non-tariff export barriers. So Indian tea exporters need to take advantage of this de minimis free duty benefit and make Indian tea more competitive in these key markets.

Big platforms like Amazon Global’s success in India lies in its control over the back-room fulfilment services — from collecting the consignments to the final delivery to customers in any country. Alibaba’s TMall encourages big brands to come to China and has created warehouses and consolidation centres in strategically located sites in Europe and the US. Shopee, the major platform in ASEAN, has embarked on an expansion programme to enter Latin America. Jumia and its rival DHL are expanding their operations in the African market.

So, is India missing out on a big export trend? Yes.

There is need to create an ecosystem where CBEC trade can flourish. For instance, fulfilment services need to be created for Indian products. A comprehensive strategy on leveraging CBEC markets can give a boost not only to tea exports but also to SME exports with international logistics, cross-border payment mechanisms and supply-chain finance. A $10 billion target in 3-5 years is not beyond reach. Create fast end-to-end logistics — from collecting consignments to the final delivery to global customers — if this has to happen.

Present orientation of export promotion councils (EPCs) is for a particular sector and primarily for B2B facilitation. These are not equipped to handle direct B2C interactions. In CBEC, the focus will not be on trade fairs or exhibitions but on facilitating the use of fulfilment services for the selling platforms to the Indian exporters, overcoming language and cultural barriers, etc.

A new EPC may be required to put the whole seamless process in place along with the training of professionals.

In case of Indian tea, the CBEC requires consolidation of consignments from exporters located in Assam, West Bengal, Tripura or South India; facilitation for interactions with the fulfilment of services including documentations, warehousing, testing, packaging, certification, shipment and export benefits.

The writer is a tea marketing consultant