E-commerce Exports from India: Tier 2 and Tier 3 MSMEs Need Export Infrastructure, Not Just Export Motivation

The orders are there. The craft is there. The growth data from Tier 2 and Tier 3 cities is impossible to ignore. What these cities need now is not more motivation, it is the export infrastructure to turn that momentum into global shipments.

The next wave of India’s export growth is not coming from its metros and data is the proof.

Over 51% of India’s 63 million MSMEs are based in Tier 2 and Tier 3 cities and they are growing faster than metros.

Open a map of India today and filter for where MSME and e-commerce activity is growing fastest. The data will show you something that metro-centric assumptions consistently miss: the momentum is not in Mumbai, Bengaluru, or Delhi. It is in Surat, Moradabad, Tiruppur, Rajkot, Jodhpur, Coimbatore.

The Numbers Behind Tier 2 and Tier 3 India

• Over 60% of India’s e-commerce transactions now originate from Tier 2 and Tier 3 markets.
• During the 2025 festive season, these cities generated 65% of all festive orders.
• Tier 3 cities alone contributed 46% of festive orders, outperforming metros in both growth and volume.
• In FY2026, 66% of all new D2C orders came from cities outside the top metros.
• Internet penetration in Tier 2 and Tier 3 India is growing at nearly 30% annually, almost twice the rate of saturated metro markets.
• More than 51% of India’s 63 million registered MSMEs are located in these cities.
• These regions already produce globally competitive products, including:
• Brassware from Moradabad
• Block prints from Jaipur
• Textiles from Surat
• Garments from Tiruppur
• Leather goods from Kanpur
• Ceramics from Khurja
• Silk from Varanasi
• The products are world-class. The global demand is real. What is missing is not ambition, but the infrastructure required to help these businesses export at scale.

Image Credits: Lexship

The question is not whether Tier 2 and 3 India can produce exportable goods. It already does and at scale. The question is whether the infrastructure exists to get those goods out efficiently.

“The gap between India’s export potential and its export reality is not a problem of ambition. It is a problem of infrastructure.”

What the Government Is Doing About It

The government has been paying attention. Over the last two years, a set of specific policy measures has been put in place to reduce the cost and complexity of exporting for small businesses, many of them directly benefiting Tier 2 and Tier 3 exporters.

• Courier export is not capped by the value of the product MSMEs can now fulfill higher-value international orders directly through courier, without needing freight forwarders.
• RoDTEP and Duty Drawback extended to courier and postal exports. Since September 2024, small exporters using couriers can claim Remission of Duties and Taxes on Exported Products and duty drawback benefits, previously unavailable on the courier channel.
• 1,013 Dak Ghar Niryat Kendras (DNKs). Export documentation and compliance support centres established across India via the Department of Posts, specifically designed to reach exporters in smaller towns and cities.
• Interest Equalisation Scheme. MSME manufacturers get a 3% interest subsidy on export credit, reducing the cost of financing international trade at a critical early stage.
• ₹25,060 crore Export Promotion Mission (FY26–FY31). Approved by the Union Cabinet, this mission consolidates fragmented export support schemes into one framework, with strong focus on MSMEs and labour-intensive sectors.
• E-commerce Export Hubs (ECEH) under FTP 2023. Five government-shortlisted operators are building physical hubs that bring customs clearance, packaging, compliance, and return handling under one roof, specifically for cross-border e-commerce exporters. Lexship is one of those five.

These are not proposals on paper. They are operational realities that small exporters from Tier 2 and Tier 3 cities can use right now.

Image Credits: Lexship

What Still Gets in the Way

Even with government support, the fundamental problem for most small exporters remains: coordination. To fulfill one international order independently, a first-time exporter typically needs to manage a global sales channel, a customs agent, a quality testing lab, an export packaging vendor, and a return logistics partner.

Each is a separate vendor, a separate relationship, a separate point where something can go wrong. Most small businesses in Tier 2 and 3 cities do not have the bandwidth to manage five simultaneous relationships for one shipment. So they either do not export or they try once, hit a wall, and go back to domestic selling.

Policy support removes some friction. But it does not solve the coordination problem unless the infrastructure works in a connected way.

What a Complete Export System Looks Like

For a Tier 2 or Tier 3 exporter to succeed globally, three things need to work in sequence — a global sales channel, origin-side export infrastructure, and destination-market compliance.

Recently, Lexship signed an MOU with Globbel and Stelcore under a shared commitment: that Indian brands, especially from Tier 2 and Tier 3 cities deserve a world-class, end-to-end path to global markets.

The three companies call it “Bharat to the World.” What it actually represents is a complete export system — a global sales channel, an origin-side export hub with government clearance, and destination-market compliance across 18+ countries, working as one coordinated corridor rather than three disconnected pieces. Here is what that looks like in practice.

Image Credits: Lexship

When these three work together, a manufacturer in Moradabad, a wellness brand from Coimbatore, or a textile exporter from Surat can go from product to global customer without managing five separate vendors. The three-partner model collapses that coordination problem.

Image Credits: Lexship

The ECEH Is the Centre of Gravity

Of the three elements, the ECEH is the one most exporters from smaller cities have the least visibility on and the one that makes the biggest operational difference.

A Tier 2 exporter does not think about customs clearance when they wake up in the morning. They think about their product, their orders, their craft. But customs clearance is where most first-time export attempts collapse. The paperwork is unfamiliar, the requirements are specific, and a single error can hold a shipment for weeks.

At an E-commerce Export Hub, an exporter brings their product in. The hub handles the rest — documentation, compliance screening, labeling, sealing, dispatch.

Under DGFT Trade Notice №14/2025, ECEH shipments receive self-sealing status, meaning no separate customs check at the airport or port gateway. The shipment moves faster, cleaner, with fewer failure points.

For One District One Product producers and MSMEs across Tier 2 and Tier 3 India, this is what closes the gap between having a great product and actually exporting it.

Image Credits: Lexship

What This Means for India’s Export Ambition

India will not reach its $200 billion e-commerce export target by 2030 by optimizing what is already working in its metros. The growth has to come from cities that are already manufacturing at scale — and now have both government policy and emerging private infrastructure working in their direction.

The products are there. The demand is there. The policy environment is more supportive than it has ever been. What remained missing was a connected, end-to-end system that a small exporter from Jaipur or Surat could actually use.

Bharat to the World: Globbel, Lexship, and Stelcore have signed an MOU to build exactly this — a single coordinated corridor for Indian brands from origin to destination, combining global commerce enablement, export hub infrastructure, and destination-market compliance into one model. It is an early signal of what export infrastructure built for India’s next wave of exporters looks like.

If you are a business in a Tier 2 or Tier 3 city with a product ready for the world, the infrastructure you were waiting for is arriving.

Ready to Export From Your City?

At Logilink India, we work with small exporters across categories — handloom to health supplements, to make international shipping manageable, not intimidating.

If you want to understand what your export journey could look like, from documentation to dispatch, reach out.

**Visit lexship.com**