DPIIT Permits Inventory-based E-commerce Model For Export Of Manufactured/produced Goods Domestically

The Department for Promotion of Industry and Internal Trade (“DPIIT”), Ministry of Commerce and Industry, Government of India, on 23.07.2026, issued Press Note No. 3 (2026 Series) (DPIIT F. No. P-15015/9/2025-FDI Policy) (“Press Note”)¹, reviewing the Foreign Direct Investment (“FDI”) policy applicable to the e-commerce sector.

Under the existing Consolidated FDI Policy Circular of 2020, as amended from time to time (“FDI Policy”), FDI is permitted in Business-to-Business (“B2B”) e commerce and the marketplace model of e-commerce, while FDI is not permitted in Business-to-Consumer (“B2C”) e-commerce and the inventory-based model of e-commerce, where the inventory of goods and services is owned by the e-commerce entity and sold directly to consumers.

With a view to facilitating greater exports and improving access to global markets for Indian sellers, the DPIIT has decided to relax the aforesaid restriction for exports. Accordingly, a new Paragraph 5.2.15.2.5 is proposed to be inserted in the FDI Policy, permitting an e-commerce entity to undertake an inventory-based model of e commerce exclusively for the export of goods/products manufactured and/or produced in India. Such exports will be required to comply with the Foreign Trade Policy, 2023, read with the Handbook of Procedures, and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, as amended from time to time.

Consequently, the existing restrictions applicable to B2C e-commerce and inventory-based e-commerce under Paragraphs 5.2.15.2.1 to 5.2.15.2.4 of the FDI Policy will not apply to exports undertaken in accordance with the newly proposed Paragraph 5.2.15.2.5. The relaxation is, therefore, specifically limited of goods/products manufactured and/or produced in India and does not extend to inventory-based e-commerce sales in the domestic market.

The Press Note also clarifies that the policy change will take effect only from the date of the corresponding FEMA notification. Accordingly, the relaxation announced under the Press Note will become effective upon issuance of the relevant FEMA notification.

Footnote

^{1 DPIIT Press Note on Review of FDI policy on e-commerce sector}

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