Govt plans fee-based arrangements for MSMEs with Flipkart, Amazon

India's government has for long been hailing the MSME sector as one of the most important sectors that can help the country achieve its economic growth and goal.

In the past couple of years, the government has made attempts to get artisans and weavers come online to help them grow.

In its latest move, the government is mulling to help small enterprises through fee-based arrangements with online marketplaces such as Amazon and Flipkart who have larger buyers and sellers base on their platforms.

If a seller exits the platform after six months, a part of the fee may have to be refunded, but the money will not be paid back to the government in case the seller sticks to selling via the marketplace for a defined period, said an ET report quoting official aware of the development.

This development comes months after MSME minister Nitin Gadkari to set up its own platform.

As per the ET report, MSME ministry had approached the government e-marketplace (GeM) which advised it to pay Amazon and Flipkart to on-board MSME units.

It is still not clear whether the MSME ministry's plan to set up its own platform has been given up.

Earlier in June, Gadkari had proposed a platform on the lines of Alibaba or Amazon to make Indian MSMEs accessible to the world.

"We are going to open a new platform for MSMEs to market and sell their products and in turn, boost the sector website, which will make them more accessible across countries, said Gadkari while addressing the International SME convention.

In December, the minister plans to meet the SBI Chairman to discuss whether the bank can work jointly with the government to run an e-commerce portal called Bharat Craft.

The minister believes that the portal has the potential to garner around Rs 10 lakh crore in revenue in the span of 2-3 years. At present, MSME contributes 29% of India’s GDP and about 50% of country export GDP.

Minister Gadkari also aims to increase the number of MSMEs and research and innovation in the sector through various schemes and programmes.

However, CAIT had strongly opposed MSME Ministry move to join hands with Amazon & Flipkart for the online sale of MSME goods.