FDI Norms Relaxed To Permit Exports By Inventory-Based E-Commerce Entities

The Department for Promotion of Industry and Internal Trade (“DPIIT”) has issued Press Note No. 3 (2026 Series) introducing a significant relaxation to India’s Foreign Direct Investment Policy (“FDI Policy”) for the e-commerce sector. The amendment is aimed at promoting exports by allowing foreign funded e-commerce entities to adopt an inventory-based model for exports of multi-brand goods manufactured or produced in India.

Existing Position

Under India’s FDI Policy, foreign investment in e-commerce has always been a study of “yes” and “no”: yes, to the marketplace model (where the platform connects buyers and sellers), and no to the inventory-based model (where the e-commerce entity owns the stock and sells it directly to consumers). This “no” was meant to protect small domestic retailers from being undercut by well-funded foreign platforms.