FDI Permitted In Inventory-based E-Commerce Indian Entities Focused On Exports

The Department for Promotion of Industry and Internal Trade (“DPIIT”) has, on July 23, 2026, issued Press Note No. 3 (2026 Series) (“Press Note 3”)¹ amending the foreign direct investment (“FDI”) policy applicable to the e-commerce sector. Under the Consolidated FDI Policy 2020² as amended from time to time (“FDI Policy”), FDI was not permitted in Indian entities that carried on an inventory-based model of e-commerce (where the inventory of goods/ services is owned by an e-commerce company and is sold to consumers directly). Press Note 3 now carves out a limited exception to this restriction for exports only. 

What Has Changed 

Press Note 3 inserts a new Para 5.2.15.2.5 (Inventory-Based Model of E-Commerce Exclusively for Exports) into the FDI Policy. By virtue of this insertion, FDI into an e-commerce entity that is engaged in the inventory-based model of e-commerce would be permitted where the model is limited exclusively for the export from India of goods/products that are