India’s thriving MSME export engine — powered by more than 60 million small businesses, artisans, handloom and handicraft workers — may face serious setbacks if global e-commerce warehousing models are adopted, trade experts have cautioned.
For nearly a decade, small exporters have benefited from the direct-to-consumer model (D2C), under which sellers list products on international marketplaces and ship from India only when orders are placed. This system has levelled the playing field for micro-producers, removing entry barriers and empowering women-led and home-based entrepreneurs.
However, a growing shift toward global “warehouse-based fulfilment” is raising alarm. Under this model, exporters must send bulk inventory to overseas warehouses where e-commerce companies handle storage, packaging, shipping, delivery, and returns — but retain full control over pricing, product visibility, and customer data.
Experts argue this structure concentrates monopoly power in the hands of global platforms, stripping Indian exporters of autonomy while squeezing margins. Producers may be compelled to compromise on quality or accept lower prices due to higher storage, insurance, and return-handling costs abroad.
Such a system, analysts warn, would weaken India’s export competitiveness, undermine its unique craft clusters — such as Kanchipuram, Moradabad, Jaipur and Varanasi — and erode bargaining power in international trade. Millions of artisans and women workers dependent on flexible, low-investment D2C exports could be pushed out of the market altogether.
The proposed model also contradicts flagship government policies aimed at promoting domestic value addition and empowering small producers. India’s Foreign Trade Policy 2023, Open Network for Digital Commerce (ONDC), and the “One District, One Product” initiative emphasise seller-led brand building, not warehouse-driven consolidation.
Trade bodies stress that India must safeguard its decentralised export ecosystem, which has enabled micro-entrepreneurs to reach global buyers without leaving their homes. Strengthening digital tools, logistics support, and financial inclusion — not shifting inventory control overseas — is the way forward, they argue.
