Government allows FDI in inventory-based e-commerce model exclusively for exports
The government on Thursday allowed foreign direct investment (FDI) in the inventory-based model of e-commerce exclusively for exports, a move aimed at boosting outbound shipments of Indian-made products by providing domestic sellers easier access to global markets without affecting the interests of small retailers.
The Department for Promotion of Industry and Internal Trade (DPIIT), in a Press Note, said it has reviewed the existing FDI policy to facilitate greater exports through enhanced market access for Indian sellers.
Under the revised policy, the restrictions on the inventory-based model of e-commerce will no longer apply for the export of goods that are manufactured or produced in India.
Accordingly, the DPIIT has inserted a new provision in the consolidated FDI policy allowing e-commerce entities to engage in the inventory-based model exclusively for the export of domestically manufactured or produced goods.
The exports must comply with the provisions of the Foreign Trade Policy 2023 and the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
Under the existing FDI framework, foreign investment is permitted in business-to-business (B2B) e-commerce and the marketplace model, where the platform acts as an intermediary connecting buyers and sellers.
However, FDI is not permitted in the business-to-consumer (B2C) inventory-based model, under which an e-commerce entity owns the inventory of goods and sells them directly to consumers.
Meanwhile, earlier this month, India has improved its position by two ranks to become the world’s 11th largest recipient of foreign direct investment (FDI), with inflows surging nearly 44 per cent to $38.89 billion in 2025, according to the United Nations Conference on Trade and Development’s (UNCTAD) 'World Investment Report'.
The country was placed at the 13th position among global FDI recipients in 2024, with inflows of $27.09 billion.
“India continued to strengthen its position as a major investment destination in 2025, supported by an active policy agenda aimed at broadening its investment base beyond services and accelerating advanced manufacturing,” the UNCTAD report states.
