The government has permitted foreign direct investment (FDI) in the inventory-based e-commerce model exclusively for exports. This move aims to enhance the overseas sales of Indian products by providing local sellers easier access to global markets without impacting small retailers. The Department for Promotion of Industry and Internal Trade (DPIIT) announced this change to promote greater exports through improved market access for Indian sellers.
Under the revised policy, restrictions on the inventory-based e-commerce model will no longer apply to the export of goods manufactured or produced in India. E-commerce entities are now allowed to operate under the inventory-based model solely for exporting domestically made goods. These exports must adhere to the Foreign Trade Policy 2023 and the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
Foreign investment was previously allowed in business-to-business (B2B) e-commerce and the marketplace model. However, the business-to-consumer (B2C) inventory-based model, where e-commerce platforms directly sell goods to consumers, did not permit FDI.
