The Government of India has introduced a new regulatory framework to promote inventory-based cross-border e-commerce exports, creating fresh opportunities for Indian manufacturers, artisans, traders and micro, small and medium enterprises (MSMEs) to expand their presence in international markets. The framework has been operationalised under the Foreign Trade Policy (FTP) 2023 through Notification No. 27/2026-27 and the corresponding Public Notice No. 25/2026-27, both issued on August 5, 2026.
The move aims to provide a structured policy mechanism for export-oriented inventory-based e-commerce operations involving goods manufactured or produced in India. With global online commerce witnessing rapid expansion, the initiative is expected to help Indian businesses overcome challenges related to overseas market access, logistics, compliance and export procedures.
New Framework to Enable Export-Focused Inventory Operations
The introduction of the framework follows the amendment of the Foreign Direct Investment (FDI) Policy through Press Note No. 3 (2026 Series), which permits inventory-based e-commerce activities exclusively for exports. The latest framework establishes the required operational guidelines under the Foreign Trade Policy while ensuring that Indian sellers receive adequate protection and benefits.
Under the new system, eligible e-commerce entities can conduct export-only inventory operations through a registered Exporter-on-Record (EOR). The EOR will procure products from Indian Sellers-on-Record (SORs) against confirmed overseas orders and undertake exports under its own name.
The EOR will also be responsible for managing export-related activities, including documentation, customs procedures and compliance with regulations in destination countries. This arrangement is expected to simplify international trade participation for smaller Indian businesses that may lack the resources or expertise required for direct exports.
Reducing Compliance Burden for Indian Sellers
The framework enables Indian sellers to focus on manufacturing, craftsmanship and innovation while outsourcing complex export responsibilities to the EOR. These responsibilities include product testing and certification, packaging, labelling, fulfilment, logistics management and reverse logistics.
Through this mechanism, sellers can gain access to global customers without having to independently manage multiple regulatory and operational requirements. The framework is also designed to ensure timely payments to sellers, transparency in overseas transactions and clear accountability for export compliance.
The initiative is expected to particularly benefit MSMEs, artisans and small manufacturers by connecting them with organised global e-commerce supply chains and enabling easier participation in international markets.
Safeguards to Ensure Transparency and Seller Protection
The government has incorporated several safeguards to ensure that inventory-based exports remain transparent, compliant and beneficial to Indian enterprises. Under the framework, export inventory can only be procured against confirmed overseas orders. This provision prevents speculative inventory accumulation for export purposes.
Export goods must be separately identified, segregated and maintained through a digital repository to ensure end-to-end traceability. The framework also prohibits the diversion of export inventory for domestic sales, thereby maintaining the export-oriented nature of the system.
Another key provision ensures that Indian sellers receive payments within the prescribed timeline, regardless of whether the EOR has received payment from overseas buyers. This measure aims to protect sellers from payment delays and improve financial certainty.
Export Benefits to Be Passed on to Sellers
The framework provides that export rebates and refunds must be appropriately shared with Sellers-on-Record based on the proportion of the Free on Board (FOB) value of their goods. This ensures that Indian manufacturers and suppliers receive the benefits associated with exports.
Additionally, sellers will have access to information related to the final selling price of their products, order status and shipment tracking details. Such transparency is expected to build greater trust among sellers and encourage more businesses to participate in cross-border e-commerce.
Strengthening India’s Global E-Commerce Presence
The framework also lays down procedures for handling returned or rejected consignments. Such goods must either be re-exported, returned to the seller or disposed of according to prescribed regulations. To strengthen monitoring and enforcement, entities operating under the framework will be required to maintain digital records and submit annual compliance certification.
The government expects the new mechanism to accelerate India’s integration into global e-commerce networks by creating a reliable export ecosystem. By combining organised fulfilment infrastructure with regulatory safeguards, the framework seeks to empower Indian businesses to reach international consumers while ensuring transparency, timely payments and effective delivery of export benefits.
The initiative marks another step towards strengthening India’s export competitiveness and enabling MSMEs and local producers to participate more actively in the growing global digital marketplace.
Author: Shivam
Shivam Dwivedi is a senior journalist with extensive experience in research-driven journalism, policy communication, and multi-platform storytelling. His areas of interest include international relations, defence, science & technology, education, urban development, agriculture, spirituality, and environmental sustainability. His work focuses on in-depth analysis, public discourse, and impactful narratives across governance and development sectors, with a strong commitment to the Sustainable Development Goals (SDGs). Contact: [email protected]
