India, the fourth-largest economy in the world, is chasing a $2-trillion export dream by 2030, a target that underscores both ambition and confidence in the country’s growing trade muscle. The country needs its merchandise shipments to grow at a compound annual growth rate (CAGR) of 11-12% and services at a CAGR of 18-19% to achieve the target.
It has recently signed free trade agreements (FTAs) with the UK and the European Union (EU), and the final framework of a trade deal with the US is in its final stages. While these pacts are expected to boost India’s exports further, achieving the export target will be challenging.
Let’s begin with the positives. Looking at the country’s business ecosystem, one thing that stands out is how a new wave of exporters is reshaping India’s trade profile. These include small businesses and solo founders from Kochi selling handmade candles on e-commerce platforms to D2C (direct-to-consumer) brands in Jaipur and Surat tapping Amazon and Shopify, among others. Many of these solo founders and micro-brands, in fact, are taking their businesses global from the very beginning.
These micro, small, and medium enterprises (MSMEs) form the backbone of India’s trade, contributing more than 45% to the country’s total exports and employing over 60% of its workforce. As per SME rating agency SMERA Ratings, the number of exporting MSMEs jumped from 52,849 in 2020-21 to 173,350 in 2024-25. During the same period, export values also increased more than threefold—from Rs 3.95 lakh crore to Rs 12.39 lakh crore. More importantly, micro and small enterprises made up the majority of this group, accounting for 91% of all exporting units. In addition, the MSME sector, comprising 68.2 million registered units, is expanding faster than large enterprises, with its value nearly tripling in four years to Rs 12.39 lakh crore, according to the latest industry reports. Undeniably, India’s export dream hinges on them.
Acknowledging their importance, the government in the Union Budget 2026 has also announced several initiatives, such as a Rs 10,000 crore SME fund and the Corporate Mitra programme, to support their growth.
However, a complex web of compliance regulations, mismatched filings, and manual approvals, among others, continues to hold back the very entrepreneurs driving India’s next export surge, say industry observers.
While policymakers focus on tariffs, ports, and market access, a quieter battle is playing out in the back offices of small exporters. It’s not about ports or tariffs; it’s paperwork.
“Licensing and compliance delays stretch MSMEs’ operations by 10-15 days, while competitors overseas complete similar processes in under four days, directly hurting domestic traders’ cost competitiveness,” says Amit Kumar Agarwal, General Secretary, Laghu Udyog Bharti, Uttar Pradesh.
And the dent is quite significant. Delays in GST (good and services tax) refund alone are blocking an estimated Rs 25,000-30,000 crore of working capital for MSMEs annually, and refund cycles are stretching to 6-9 months, far longer than the global benchmarks of 30-45 days, according to estimates from the Federation of Indian Export Organisations (FIEO).
“Almost one-fifth of an exporter’s time is still spent on various manual compliances, which could be saved through digitisation. It can significantly free up executive time for productive pursuits like improving quality and marketing,” says Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME).
A Maze of Paperwork
From GST mismatches to delays in securing Foreign Inward Remittance Certificates (FIRAs), India’s export processes remain slow, fragmented, and opaque. For small sellers, this often translates into delayed cash flows or even cancelled orders. Experts note that just as smooth operations at airports and ports, efficient multi-modal logistics networks, and favourable trade agreements are crucial to facilitating economic activities, so is a robust compliance ecosystem.
In India, an exporter’s compliance journey begins with the Importer-Exporter Code (IEC). Exporters say that even a missed update or an inactive profile can halt shipments without warning. The documentation trails, including shipping bills, invoices, packing lists, and certificates, must align perfectly, as even small discrepancies can trigger costly delays. And the work doesn’t end once the goods are shipped. Exporters often find themselves chasing banks for or electronic Bank Realisation Certificates (eBRCs), documents essential for claiming GST refunds or benefits under schemes such as RoDTEP.
“Every bank, often every branch, has its own understanding of purpose codes, EDPMS, and document submissions. Exporters, especially smaller ones, end up filling out forms, chasing relationship managers, and waiting days just to access their own money. We see exporters lose days of productivity and anywhere from Rs 3,000 to Rs 5,000 per $10,000 payment. Scaled up across the ecosystem, it’s a massive drain on export potential,” says Srivatsan Sridhar, Co-founder and CEO of Skydo, a cayments platform, which processes $500 million (about Rs 4,200 crore) in annual payments for over 25,000 exporters and MSMEs.
While the government’s faceless assessment has been a transformative step in India’s customs reforms, many MSMEs still face hurdles beyond Customs,” says Krishan Arora, Partner, Grant Thornton Bharat. “Delays in GST refunds due to return mismatches, slow IEC updates on the DGFT portal, and complications with forex documentation, especially when using digital payment gateways, create cash flow strain and uncertainty. These pain points often outweigh the gains made at Customs front.”
The issue is not just the time exporters lose, but it is also the opportunity cost of stalled growth. Instead of focusing on expanding orders or exploring new markets, many MSMEs are stuck navigating forms and portals. “Unlike legacy export houses, solopreneurs and D2C brands don’t have finance teams or compliance officers. They are juggling product development, customer management and banking paperwork at once. The gap between how they operate digitally and how the system supports them is growing,” adds Sridhar.
“The real challenge lies in the fragmented nature of the broader export compliance ecosystem. Lack of integration with partner government agencies, such as FSSAI or CDSCO authorities, leads to delays and duplication,” says Arora of Grant Thornton Bharat.
When Compliance Stalls Momentum
Some exporters’ ordeals best illustrate the cost of these frictions. Rahul Gupta, a content marketing freelancer based in Indore, had been receiving payments from a Bulgarian client directly into his savings account for two years without ever requesting a FIRA. It wasn’t until the 2024 tax season that he realised he had no official proof of export income, and without a FIRA, he couldn’t even claim his GST refund.
Gupta struggled for several months before he started using Skydo, a platform designed for cross-border payments. “What could have been a serious headache gets sorted when FIRAs start coming automatically with every payment through Skydo,” says Movin Jain, Co-founder of Skydo.
In Jaipur, Rohit runs a small Amazon storefront selling handcrafted décor. He recounts his struggle of chasing banks for eBRCs each time a payment is received. The process typically dragged on for two weeks, filled with back-and-forth emails, delays, and additional fees. “After months of this, he tried Skydo on a friend’s recommendation, and now the eBRC just shows up automatically,” Jain says.
Even as Gupta and Rohit find solutions to their problems following initial hurdles, these examples highlight how compliance, intended as a safeguard, often ends up crushing momentum. For first-time exporters, the initial thrill of a global order can quickly dissolve into confusion, anxiety and long waits.
The banks, customs, DGFT, and various other agencies for pre-shipment inspections still work in silos. This creates enormous difficulties for exporters,” says Bhardwaj of FISME.
Compliance inefficiencies aren’t just limited to individuals. Even established micro-enterprises face hurdles. Kolkata-based Pakira Exports, a garments exporter, struggled with FIRA delays of up to three weeks, slowing its GST refunds and tying up working capital. “Several follow-ups and branch visits were needed for each FIRA, which interfered with operations and caused compliance anxiety,” recalls Atanu Pakira, the firm’s founder.
It’s in cases like these that digital cross-border payments and compliance platforms such as Briskpe are stepping in to ease the pressure. By digitising and automating compliance-heavy steps, they are helping small exporters cut down on turnaround time. After onboarding with Briskpe, the Pakira exports began receiving digital eFIRAs within 24 hours. “What used to be weeks of waiting turned into a seamless process,” says Sanjay Tripathy, Co-founder and CEO of Briskpe.
The shift also freed up working capital, reduced paperwork stress, and improved operational efficiency. Briskpe is now piloting automated e-BRC issuance for faster EDPMS closure, critical to unlocking refunds and avoiding penalties. For MSMEs that run on thin cash cycles, the difference between two weeks and 24 hours can determine whether they accept their next order. “Traditional banking systems haven’t kept pace with modern exporters,” Tripathy says, adding that at a time when global ambitions .
While compliance hurdles may delay shipments, liquidity gaps, small exporters flag, can halt them altogether. Payment lags and cash flow disruptions hit MSMEs the hardest, leaving them stretched for working capital. Industry leaders argue that these are not isolated glitches but structural bottlenecks embedded in India’s export architecture. “India’s $2 trillion export ambition is real, but paperwork is becoming a serious growth bottleneck. Delayed GST refunds, fragmented documentation, IEC activations and high EDPMS closure costs are locking up MSME working capital and hurting competitiveness. Infrastructure today isn’t just ports and roads — compliance speed is economic infrastructure. If export processes across customs, GST and payments are fully digitised and integrated, India can scale exports much faster and at lower cost,” says Prachi Dharani, Co-founder and CEO, PayGlocal.
The Bigger Picture
India’s export growth is no longer held back by lack of demand or competitiveness but by invisible compliance frictions, believe exporters. Each missed refund or delayed FIRA is not just a paperwork glitch but a loss of working capital, stalled shipments and eroded confidence. Through multiple real-world examples, fintech platforms are proving that automation can simplify reconciliation, digitise KYC, and shorten payment cycles. “For small exporters, these aren’t conveniences. They’re survival tools,” adds Sridhar.
The government’s commitment to promoting exports, especially from India’s vibrant MSME sector, is clear. To sustain momentum, a few targeted improvements could go a long way in easing compliance for micro-exporters. “First, a simplified, automated GST matching system is critical. Micro-exporters often lack dedicated tax teams and struggle with reconciliation across GSTR-1 and GSTR-3B,” says Krishan Arora, Partner, Grant Thornton Bharat.
“Second, IEC and bank detail updates on the DGFT portal should be made real-time through Aadhaar-authenticated e-KYC and API integration with banks. Even minor delays today can block access to export incentives or create regulatory friction mid-shipment.”
“Third, the process around foreign exchange compliance must be modernised. Exporters using digital payment channels face unnecessary hurdles when FIRAs are not recognised in place of FIRCs under GST law. A unified framework—linking RBI’s EDPMS with ICEGATE, DGFT, and GST systems—along with recognition of e-FIRAs and digital remittances as valid, would significantly streamline refund claims and reduce paperwork,” he adds.
He believes these steps can not only simplify the compliance burden but also signal the government’s continued support for small exporters looking to compete globally.
India, the fourth-largest economy in the world, is chasing a $2-trillion export dream by 2030, a target that underscores both ambition and confidence in the country’s growing trade muscle. The country needs its merchandise shipments to grow at a compound annual growth rate (CAGR) of 11-12% and services at a CAGR of 18-19% to achieve the target.) with the UK and the European Union (EU), and the final framework of a trade deal with the US is in its final stages. While these pacts are expected to boost India’s exports further, achieving the export target will be challenging.
“The government’s [Budget] push to strengthen MSME financing through the SME Growth Fund, expanded guarantees, and the GeM-TReDS integration is less about changing payment rails overnight and more about fixing the underlying liquidity constraints that shape cross-border transactions,” says Vinod Kumar, President, India SME Forum. “In the near term, the biggest impact will be improved cash-flow predictability for exporters, which should translate into higher participation in global markets and increased transaction volumes.”
From a policy perspective, the government’s move signals a clear intent to deepen trade facilitation and strengthen the financial support for exporters,” says Munindra Verma of M1 NXT. “If implemented effectively, it can positively influence cross-border trade by improving liquidity access, accelerating receivables realisation and encouraging greater digitisation across the trade value chain. For MSMEs in particular, faster working capital cycles and better integration trade platforms and financing channels could reduce payment friction and enhance confidence in international transactions.”
“If fintechs could find a way to integrate TReDS data with trade and payment tracks, cross-border flows could also become cheaper, faster, and more risk-assessed. There are caveats, though,” Bhardwaj says. “There is a need for regulatory alignment among the RBI, FEMA, and AML,” he says, while emphasising the need for robust FX risk management, seamless data interoperability, stronger partnerships with global banks, and the onboarding of smaller exporters. “Without comprehensive cross-border settlement reforms, the gains could remain financing-led, not payment-led,” he adds.
Meanwhile, the government is doing cluster-level surveys across the country to address the challenges faced by MSMEs, especially issues related to registrations and compliances, according to reports. The Corporate Mitra programme, announced in the Budget, is also expected to assist MSMEs with documentation, regulatory compliance and GST filing.
While India continues to chase its export goal, the real leap may not come just from new trade pacts but from a system that allows exporters to focus on their products, rather than paperwork.