DPIIT permits foreign investment in export-oriented inventory-based e-commerce model

The Department for Promotion of Industry and Internal Trade (DPIIT) has issued Press Note 3 (2026 Series) [Press Note] liberalizing the foreign direct investment (FDI) policy for the e-commerce sector. The aforesaid policy change has been incorporated under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules) and is effective from 3 September 2026, being the date of publication of the relevant notification in the Official Gazette.

In terms of the extant FDI Policy read with NDI Rules, FDI has been permitted under the automatic route in marketplace-based e-commerce models, while FDI is prohibited in inventory-based e-commerce activities. Consequently, marketplace e-commerce entities having FDI have been restricted from owning inventory for sale to consumers. 

Pursuant to the amendment, marketplace e-commerce entities, having FDI, are now permitted to undertake an inventory-based e-commerce model for export of goods manufactured and/or produced in India. Such exports are required to be undertaken in accordance with the applicable provisions of the foreign trade policy, Handbook of Procedures and FEMA regulations governing exports. 

The Press Note further clarifies that the existing restrictions applicable to business-to-consumer e-commerce and inventory-based e-commerce models should not apply to export transactions undertaken under this framework. 

Source: Press Note No. 3 (2026 Series) DPIIT F No. P-15015/9/2025-FDI Policy dated 23 July 2026 read with Notification no. S.O. 4870(E) dated 2 September 2026