The government of India is preparing to launch consultations with industry stakeholders to frame guidelines that would allow an inventory-based model for e-commerce exports, aiming to expand global market access for small and medium sellers.
Industry players have long urged such a move, but progress has gained urgency after the United States scrapped a provision permitting tax-free imports of small packages valued up to $800, a change that could weigh heavily on the growth prospects of Indian exporters.
If adopted, the proposal would mark a departure from India’s existing foreign direct investment (FDI) rules, which currently prohibit foreign e-commerce marketplaces such as Amazon and Walmart’s Flipkart from holding inventory. Sources suggest the shift reflects New Delhi’s push to accelerate export growth at a time when trade talks with Washington may soon resume.
The Directorate General of Foreign Trade (DGFT) has convened a meeting on September 15, which will see participation from Amazon, Walmart, logistics providers, and various government departments. An agenda note reviewed by TOI highlighted that the meeting will focus on establishing a third-party facilitation framework.
Under the proposed model, a dedicated export entity tied to e-commerce platforms would oversee compliance, logistics, and customs processes. This approach is designed to allow micro, small, and medium enterprises (MSMEs) to concentrate on product development, quality, and branding.
Currently, fewer than 10% of Indian MSMEs engaged in online sales participate in global e-commerce exports, facing barriers such as complex documentation, compliance hurdles, and high logistics costs. Studies show that nearly 87% of enterprises that joined e-commerce exports between 2020 and 2024 had exited the sector by 2025.
The DGFT note further indicated that enabling such a system could require amendments to the Department for Promotion of Industry and Internal Trade’s (DPIIT) FDI policy, including reconsideration of the ban on inventory-based e-commerce for export-only models.
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