The Indian government has introduced a new framework enabling inventory-based online sales for exports, streamlining procedures for small and medium-sized enterprises while safeguarding domestic market restrictions.
India has moved to open a new export channel for e-commerce firms, formalising a framework that allows inventory-based online sales of Indian goods to overseas buyers. According to the government notification issued on August 5, the system sits under the Foreign Trade Policy, 2023, and is intended to give exporters a dedicated route for cross-border fulfilment without changing the rules that still restrict domestic inventory-led e-commerce. The change follows an amendment to foreign investment rules that permits inventory-based e-commerce only when it is used for exports.
The revised model allows eligible e-commerce entities to operate through a registered Exporter-on-Record, or EOR, which buys products from Indian Sellers-on-Record against confirmed orders from abroad and exports them in its own name. The government says this arrangement shifts much of the paperwork and operational burden away from individual sellers, with the EOR responsible for customs formalities, destination-country compliance, product testing, certification, packaging, labelling, logistics and reverse logistics.
Officials say the policy is meant to widen access for manufacturers, artisans and micro, small and medium-sized enterprises, which often lack the scale to manage export processes on their own. Sellers are expected to gain clearer visibility over final sale values, shipment status and payment flows, while export rebates and refunds must be passed through proportionately on the basis of the free-on-board value attributable to their goods. The framework also requires digital record-keeping and annual compliance certification, signalling that the government wants easier exporting without loosening oversight.
At the same time, the rules are designed to prevent diversion into India’s domestic market. Export inventory can be created only against confirmed orders, must be separately identified and tracked in a digital repository, and cannot be sold at home. Returned or rejected shipments must be re-exported, sent back to the seller or disposed of under the prescribed process. The policy therefore combines a more flexible export route with firm safeguards aimed at preserving the long-standing barriers around domestic e-commerce competition.
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