Govt Proposal Ready To Tweak FDI Rules To Boost E-Commerce Exports Via Amazon, Flipkart

The government is preparing to ease foreign direct investment (FDI) rules in a move that could enable major e-commerce platforms such as Amazon, Flipkart and eBay to play a greater role in boosting India’s export footprint, people aware of the matter told NDTV Profit on Thursday.

The Directorate General of Foreign Trade (DGFT) has drafted a proposal to launch a pilot project allowing e-commerce companies to set up dedicated export entities, the sources said. This would require changes in the Department for Promotion of Industry and Internal Trade’s (DPIIT) current FDI guidelines, which restrict e-commerce players from running inventory-based models in the domestic market.

The draft proposal will be sent to key stakeholders, including DPIIT, the Central Board of Indirect Taxes and Customs (CBIC), the Reserve Bank of India (RBI), and the Ministry of Finance for their views and comments.

Sources said the pilot framework would allow e-commerce players to hold export-dedicated inventory under stringent safeguards. These include mandatory traceability of goods, clear segregation of export inventory, strict reporting requirements, escrow-based settlement of transactions and periodic audits.

If approved, the measure is expected to create new export channels for small and medium Indian sellers, leveraging the global supply chain and customer base of large e-commerce platforms.

Earlier, on Sept. 17, NDTV Profit reported that the government was preparing a major policy shift to boost India’s e-commerce exports by creating special export entities tied to online platforms.

According to meeting notes reviewed by NDTV Profit, the Commerce Ministry was considering a pilot program that would allow only a few export entities to operate initially before scaling up. The proposed model has been under discussion with global players such as Amazon, Flipkart, FedEx, DHL, industry bodies, and the Reserve Bank of India's Foreign Exchange Department.

The move is designed to simplify cross-border trade for small sellers who often struggle with the complexity and cost of compliance. Export entities would act as third-party facilitators, handling documentation, coordinating logistics, and even processing refunds or returns. Importantly, they may also be entitled to claim export benefits such as GST refunds and duty drawback, with a mechanism being considered to share those incentives with MSMEs.