DPIIT Allows Export-Focused Inventory-Based E-Commerce Under Revised FDI Policy

The Government of India has permitted foreign direct investment (FDI) in the inventory-based model of e-commerce exclusively for export activities. The policy change was announced by the Department for Promotion of Industry and Internal Trade (DPIIT) through a Press Note.

The move is aimed at helping Indian manufacturers and sellers access global markets more efficiently through e-commerce channels. The government stated that the revised framework is intended to support export growth without affecting domestic retail trade.

FDI In Inventory-Based E-Commerce for Exports Allowed

Under the revised policy, restrictions on the inventory-based model of e-commerce will no longer apply to exports of goods manufactured or produced in India. Previously, FDI was not permitted in inventory-based Business-to-Consumer (B2C) e-commerce operations, where the e-commerce entity owned the inventory and sold products directly to consumers.

The latest relaxation creates a specific exemption for export-focused operations. This enables foreign-invested e-commerce entities to directly participate in the export of eligible Indian-made products.

Understanding DPIIT's New FDI Policy Change

The DPIIT has inserted a new provision in the consolidated FDI policy to formalise the change. According to the clause, an e-commerce entity can engage in an inventory-based model exclusively for exporting goods and products manufactured or produced in India.

Such operations must comply with the Foreign Trade Policy 2023 and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015. The amendment provides regulatory clarity for companies seeking to expand export-oriented e-commerce activities.

Existing Rules for B2B And B2C E-Commerce Remain

The government has not altered the broader framework governing e-commerce investments in India. FDI continues to be permitted in Business-to-Business (B2B) e-commerce and marketplace models.

At the same time, FDI remains prohibited in domestic inventory-based B2C e-commerce operations serving Indian consumers. The latest announcement only creates an exception for export transactions and does not extend to domestic retail sales through inventory-led platforms.

How The Policy Could Support India's Export Growth

The government indicated that the decision is intended to facilitate greater exports by improving access to international markets for Indian sellers. Export-oriented e-commerce platforms can potentially help manufacturers reach overseas customers in a more efficient manner.

The policy may also strengthen India's position in cross-border digital commerce by encouraging investments in export infrastructure and supply chains. By limiting the relaxation to exports of domestically manufactured and produced goods, the government aims to support outbound trade while safeguarding domestic retail interests.

Read More: India Opposes US Forced Labour Tariffs.

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Conclusion

The DPIIT's policy revision allows FDI in inventory-based e-commerce operations dedicated exclusively to exports of Indian-made goods. The change removes a key restriction for export-focused e-commerce entities while maintaining existing rules for domestic B2C e-commerce.

Companies operating under the provision will be required to comply with the Foreign Trade Policy 2023 and applicable foreign exchange regulations. The measure is expected to improve international market access for Indian products and support the country's export ecosystem.

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