India Allows FDI in Inventory-Based E-Commerce Model for Exports:
The government has revised the Foreign Direct Investment policy to permit foreign-funded e-commerce entities to maintain inventories exclusively for exporting goods manufactured or produced in India. Foreign-owned e-commerce companies can now own and manage inventory in India, provided the goods are domestically produced and sold only in overseas markets. The Department for Promotion of Industry and Internal Trade has created an export-specific exception to the restrictions on inventory-based e-commerce.However, foreign-funded inventory-based e-commerce remains prohibited for domestic retail sales, preserving safeguards for small traders and the ban on FDI in multi-brand retail.The policy aims to improve Indian sellers’ access to global markets, promote exports and reduce the compliance burden on MSMEs. The measure could help Tier-2 and Tier-3 manufacturers, artisans and small businesses export products such as handicrafts, garments, books, art, gems and jewellery. Beneficiaries: Global platforms such as Amazon and Walmart-owned Flipkart can source products from Indian manufacturers, manage inventories and handle export-related paperwork, testing, labelling and traceability requirements.
