Commerce ministry notifies norms for inventory-based e-commerce exports
The Directorate General of Foreign Trade (DGFT) notified operational procedures, along with a new application form (Aayaat Niryaat Form, ANF-9A), for registration of "Exporters-on-Record" (EORs) under India's inventory-based e-commerce export framework.
The framework permits entities with foreign investment to hold inventory of goods solely for outbound (export) shipment, provided they register as an Exporter-on-Record with the DGFT.
Indian sellers and manufacturers will supply goods against confirmed overseas orders to these registered EORs, which then handle export logistics, compliance, and destination-country requirements such as testing, certification and labelling.
Registered EORs must notify the DGFT of any change in registration particulars within 30 days; the framework includes safeguards intended to ensure timely payments and regulatory oversight for Indian manufacturers and MSMEs supplying goods into it.
FDI Policy in E-Commerce: Marketplace Model vs Inventory Model
India's FDI policy for e-commerce has long distinguished between two business models. The "marketplace model" — an e-commerce entity providing an IT platform to connect buyers and sellers — has permitted 100% FDI under the automatic route since Press Note 2 (2018 Series), issued by the (then) Department of Industrial Policy and Promotion, effective 1 February 2019. The "inventory-based model" — where the e-commerce entity itself owns the inventory and sells directly to consumers — has been expressly prohibited for FDI in the domestic (B2C) context, precisely to prevent large foreign-funded platforms from undercutting price-setting through owned inventory.
Key Details
- Press Note 2 (2018) also barred marketplace entities or their group companies from owning more than 25% equity in any vendor selling on their platform, and prohibited exclusive vendor arrangements — rules aimed at the same underlying concern (price/inventory control) as the inventory-model ban.
- The August 2026 notification operationalises an export-only carve-out: FDI-backed entities may now hold inventory when the goods are being exported (not sold domestically to Indian consumers), addressing a gap that had constrained India's participation in global cross-border e-commerce.
- The distinction between "domestic B2C" and "export-oriented" inventory holding is the crux of why this needed a fresh regulatory framework rather than falling under the existing marketplace-model FDI permission.
The Exporter-on-Record mechanism is designed specifically to operate within this export-only carve-out — FDI-backed entities can hold inventory as an EOR only for goods destined for overseas buyers, keeping the domestic inventory-model prohibition intact.
Foreign Trade Policy 2023 and India's Push for E-Commerce Exports
The Foreign Trade Policy (FTP) 2023, notified by the DGFT under the Ministry of Commerce and Industry, is India's five-year (extendable) trade policy framework and the first to dedicate a full chapter to promoting e-commerce exports, recognising the sector's role in bringing MSMEs, artisans and small exporters into global markets.
Key Details
- The FTP 2023 raised the value limit for exports through courier from ₹5 lakh to ₹10 lakh per consignment, to make courier-based export more usable for small exporters.
- It introduced "E-Commerce Export Hubs" (ECEHs) — dedicated zones bundling logistics, customs clearance, warehousing, and certification at a single location — with DGFT inviting pilot proposals via trade notices.
- It also envisages "Dak Ghar Niryat Kendras" (postal export centres) on a hub-and-spoke model in partnership with Foreign Post Offices, to extend export access to artisans and MSMEs in hinterland and landlocked regions.
- Courier and postal exports have been integrated with ICEGATE (the customs electronic gateway), allowing digital-first and new-to-export businesses to claim Foreign Trade Policy benefits more easily.
The Exporter-on-Record framework is a further, more specific instrument within this broader FTP 2023 e-commerce export push — it addresses the FDI/inventory constraint that generic e-commerce export hubs and courier-limit reforms do not, by enabling foreign-funded entities to legally stock export inventory in India.
Statutory Basis: The Foreign Trade (Development and Regulation) Act, 1992
DGFT's authority to issue such operational notifications flows from the Foreign Trade (Development and Regulation) Act, 1992, which empowers the Central Government to formulate and amend India's import-export policy through orders published in the Official Gazette, and establishes the Director General of Foreign Trade as the implementing authority.
Key Details
- The 1992 Act replaced the earlier, restriction-oriented Imports and Exports (Control) Act, 1947, marking a post-1991 liberalisation shift from "controlling" to "facilitating and regulating" trade.
- DGFT (under the Ministry of Commerce and Industry) implements the Foreign Trade Policy under this Act, while cross-border payment and investment aspects of such frameworks (e.g., inflow of FDI into an EOR entity) fall under the Foreign Exchange Management Act (FEMA), 1999, administered with the RBI — illustrating the layered regulatory architecture behind a single trade notification.
The EOR registration procedure (ANF-9A) is a DGFT-level operational instrument issued under this 1992 Act; the underlying permission for foreign investment into export-only inventory entities is a separate FDI policy decision under FEMA, showing how trade-facilitation and investment-regulation layers work together.
- New application form for Exporter-on-Record registration: ANF-9A (Aayaat Niryaat Form).
- EORs must report changes in registration particulars to DGFT within 30 days.
- Marketplace-model e-commerce: 100% FDI under automatic route since Press Note 2 (2018 Series), effective 1 February 2019.
- FTP 2023 courier export value limit: raised to ₹10 lakh per consignment (from ₹5 lakh).
- Statutory basis for DGFT's policy-making role: Foreign Trade (Development and Regulation) Act, 1992.