Telecom Chairman Kiran Karnik said these firms need incentives and modern technology to achieve global competitiveness.
"e-commerce is providing them these platforms in a cost effective way. Any policy which restricts e-commerce will also create limitations for the growth of SMEs. It is therefore of critical importance to create the right policy environment for the liberalisation of B2C e-Commerce," he added.
Besides, the move will also enable exchange of expertise and knowledge to propel the sector into next phase of growth.
Yebhi.com CEO Manmohan Agarwal said the Indian e-commerce industry is poised to cross USD 50 billion mark and has the potential to become one of the largest markets.
"Heavy investments to the tune of tens of billions is required to fast track growth of the industry. FDI will boost infrastructure development and spur manufacturing facility besides bringing in the much needed investments," he added.
ShopClues CEO and co-founder Sanjay Sethi said opening up FDI will also play an important role in growth of supporting agencies and service providers like logistics, payments and data analytics firms.
Fashionandyou CEO Aasheesh Mediratta said Prime Minister Narendra Modi has already indicated e-commerce industry's potential and its impact on the way business and trade will be conducted in future.
"We look forward to his government reviewing the current policy and enabling FDI for B2C Ecommerce so that the industry can scale global heights like its Chinese and other emerging market counterparts," he added.
SMEs are playing a large role in bridging the divide between large and small cities giving people in small towns a choice to purchase items they want, Mirchmart co-founder Punit Sindhwani said adding research suggests e-commerce is growing at a faster rate in tier II and tier III cities.
Utsavfashion's Pradeep Katyal said: "Today over 90 per cent of our business is from overseas which has helped us earn about Rs 100 crore in foreign exchange for the country. Also, in turn, we source 100 per cent of our merchandise from SMEs who are seeing their business grow exponentially."