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Dated: 24.07.2026

India’s New FDI Policy: E-Commerce Entities Allowed Inventory-Based Exports of Domestically Manufactured Goods

The Government of India has introduced a significant revision to its Foreign Direct Investment (FDI) policy, specifically targeting the e-commerce sector. This move is designed to boost exports by allowing e-commerce entities to engage in inventory-based exports of goods manufactured or produced within India. Here’s a comprehensive overview of what this policy change means for businesses, exporters, and the broader Indian economy.

Background: FDI in E-Commerce

Traditionally, India’s FDI policy permitted foreign investment in the Business-to-Business (B2B) e-commerce and marketplace models. However, it strictly prohibited FDI in Business-to-Consumer (B2C) e-commerce and the inventory-based model, where the e-commerce entity owns and sells inventory directly to consumers. This restriction was intended to protect domestic retailers and ensure a level playing field.

What Has Changed?

To facilitate greater exports and provide Indian sellers with easier access to global markets, the government has reviewed and amended the existing FDI policy. The key change is the relaxation of restrictions on the inventory-based model of e-commerce, but exclusively for exports of domestically manufactured and/or produced goods.

Key Provisions of the Revised Policy

1. Inventory-Based Model Permitted for Exports
   • E-commerce entities can now own inventory and sell goods/products manufactured or produced in India directly to overseas buyers.
   • This is allowed only for exports, not for domestic sales.
2. Alignment with Other Regulations
   • The policy is subject to the provisions of the Foreign Trade Policy 2023, the Handbook of Procedures (HBP), and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, as amended.
3. Exemption from Previous Restrictions
   • The earlier restrictions on B2C and inventory-based e-commerce models do not apply to export activities under this new provision.
4. Effective Date
   • The revised policy will come into effect from the date of the relevant FEMA (Foreign Exchange Management Act) notification.

Implications for Indian E-Commerce and Exporters

Opportunities

• Boost to Make in India: By allowing inventory-based exports, the policy encourages manufacturing and value addition within India.
• Global Market Access: Indian sellers, especially MSMEs, can now leverage e-commerce platforms to reach international customers directly.
• Attracting FDI: The relaxation is likely to attract more foreign investment into the Indian e-commerce export ecosystem.

Compliance Requirements

• E-commerce entities must ensure that only goods manufactured or produced in India are exported under this model.
• All exports must comply with the applicable provisions of the Foreign Trade Policy and FEMA regulations.

How Businesses Can Leverage the New Policy

1. Set Up Export-Focused E-Commerce Operations
   • Businesses can establish inventory-based e-commerce models dedicated to exports, owning and managing stock for international sales.
2. Collaborate with Indian Manufacturers
   • E-commerce platforms can partner with domestic manufacturers to source products for export, ensuring compliance with the policy.
3. Invest in Export Infrastructure
   • Companies may invest in warehousing, logistics, and technology to streamline export operations and enhance global competitiveness.

Conclusion

India’s revised FDI policy marks a pivotal step in empowering domestic manufacturers and exporters to tap into global markets through e-commerce. By permitting inventory-based exports, the government aims to strengthen the ‘Make in India’ initiative, attract foreign investment, and position India as a major player in global e-commerce exports.

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Source: DPIIT

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