- Government allows FDI in inventory-based e-commerce only for export-oriented operations
- Exported goods must be manufactured or produced in India under the revised policy
- FDI in inventory-based e-commerce for domestic retail remains prohibited
The government on Thursday allowed foreign direct investment (FDI) in an inventory-based e-commerce model exclusively for export-oriented operations, a move aimed at boosting India's outbound shipments while safeguarding the interests of small retailers.
Under the revised policy, companies availing of the provision will be permitted to export only goods that are manufactured or produced in India.
This decision confirms the NDTV Profit newsbreak, as the publication had reported about the development on Sept. 25, 2025.
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FDI in inventory-based e-commerce for domestic retail operations, however, will continue to remain prohibited.
"In order to facilitate greater exports through easier and increased access of global markets by Indian sellers, the extant FDI Policy has been reviewed and it is decided that the restrictions on inventory-based model of e-commerce shall not apply in case of exports of domestically manufactured and/or produced goods/products," the Department for Promotion of Industry and Internal Trade (DPIIT) said in a press note.
DPIIT, an arm of the commerce and industry ministry, deals with foreign direct investment (FDI) related issues. It releases policy changes through press notes (PNs).
As per the current FDI policy, overseas investments are permitted in business-to- business e-commerce and marketplace models.
However, it is not allowed in business-to-consumer e-commerce and inventory-based e-commerce models where inventory of goods and services is owned by an online retailer and is sold to consumers directly.
DPIIT has inserted a clause in the policy, which states: "An e-commerce entity is permitted to engage in an inventory-based model of e-commerce exclusively for the export of goods/products manufactured and/or produced in India as per the applicable provisions of the Foreign Trade Policy 2023...and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015".
It added that the restrictions on B2C and the inventory-based model of e-commerce will not apply to the export of goods/products through e-commerce.
The decision will come into effect from the date of FEMA (Foreign Exchange Management Act) notification, it said.
The proposal was initially mooted by the Directorate General of Foreign Trade (DGFT) as it was aimed at boosting India's exports through the e-commerce medium.
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E-commerce stakeholders, too, have demanded the same.
The decision is important as the government is looking at ways to boost exports through the e-commerce medium.
It is working on other measures as well, such as setting up e-commerce export hubs.
As per estimates, the country's e-commerce exports are about USD 2 billion currently compared to China's staggering USD 350 billion.
The global e-commerce trade is about USD 800 billion and is estimated to reach USD 2 trillion by 2030.
(With PTI inputs.)
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