The central bank has issued a requirement for small entrepreneurs related to business-to-consumer ecommerce exports in a bid to promote local brands in the international markets and increase export remittances, it said on Wednesday.
The State Bank of Pakistan (SBP) said the new regulatory framework will facilitate business-to-consumer ecommerce exports from Pakistan.
“Under the new regulatory framework, the mandatory requirement of export (E) form has been done away with and now an exporter can export goods up to $5,000 per consignment without the requirement of ‘E’ Form,” the SBP said in a statement. “This step will facilitate exports in small quantities directly to the consumers. This will also help small entrepreneurs and exporters who typically export varied goods in small quantities and find it cumbersome to fulfill the detailed requirements of E form that is mainly designed for bulk exports.”
Up till now goods could only be exported after certification of electronic/ manual export (Form-E) by the authorised dealers and subsequent filing of goods declaration by the customers with the customs. The ‘E’ Form was required for each shipment with complete description of the goods being exported and had been designed keeping in view the export of large quantities of homogenous goods.
“However, for exports of small value different items to individuals destined for different jurisdiction, the existing process was not conducive,” said the SBP.
Domestic ecommerce market is estimated to have expanded to Rs234.6 billion, up 55.5 percent year-on-year during the last fiscal year of 2019/201, according to the SBP. In overall terms, the estimated ecommerce sales in Pakistan have grown at a compound annual growth rate of 62 percent between FY2017 and FY2019.
The SBP said the global emerging trends especially in the consumer market place have seen a major shift from traditional market place to e-commerce due to the advent of new technologies. A surge in this trend was particularly witnessed during the global lockdown owing to COVID-19 pandemic.
“In line with these trends, SBP focused on facilitating cross border trade for business-to-consumer exports from Pakistan, including by small entrepreneurs and exporters,” said the SBP. “This was aimed at improving competitiveness and digital connectivity of Pakistani businesses with the global market during the development phase of ecommerce policy.”
In 2000, the SBP issued regulatory instructions to promote B2C ecommerce, in foreign exchange manual, with primary focus on opening of internet merchant account to facilitate ecommerce. However, with advancement in technology, these instructions needed to cater to the current business dynamics of e-commerce and therefore required to be replaced.
SBP collaborated with the relevant stakeholders including business community, customs, ministry of commerce, courier companies and banking industry in a bid to develop a regulatory framework, which addresses the market needs and takes into account regulatory objectives.
The new regulatory framework would address the pressing demand of e-commerce exporters, including the small entrepreneurs, besides providing the much needed impetus for the recognition and growth of e-commerce exports from Pakistan.
“It would also pave the way for the big corporate brands, small and medium enterprises, and startups, to enter the global consumer markets and contribute to the exports earning of the country,” said the SBP. “The new regulatory framework is expected to be beneficial in improving country’s rating in the ease of doing business index. Moreover, this framework would also help in documenting the exports of small shipments, which earlier could not be included in the formal exports of the country due to absence of any such framework.”
Image Source: Tribune
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