FDI liberalisation for e-commerce inventory: A shot in the arm for cross-border e-commerce

The government’s decision to relax FDI restrictions for inventory-based e-commerce exports is a natural progression of the export facilitation measures introduced by CBIC earlier this year. As part of its customs reform agenda effective from April 1, 2026, CBIC removed the ₹10 lakh cap on courier export consignments, introduced a framework for handling returned and rejected shipments, and operationalised a Return to Origin (RTO) mechanism for uncleared consignments. These measures addressed key logistical and compliance bottlenecks in cross-border e-commerce and laid the foundation for a more efficient export ecosystem.

Building on these customs initiatives, the government has now liberalised the FDI framework by permitting foreign-invested e-commerce entities to operate an inventory-based model exclusively for exports of goods manufactured or produced in India. Traditionally, FDI was permitted in the marketplace model of e-commerce, while inventory-based B2C e-commerce—where the platform owns the inventory and sells directly to consumers—remained restricted. The latest amendment creates a focussed exception for exports, recognising the distinct role of e-commerce in connecting Indian products with global consumers while retaining the restrictions applicable to the domestic market.

The significance of this change lies in the ability of global e-commerce platforms to warehouse, aggregate, fulfil and export Made-in-India products through their own inventory-led models. This can enable more efficient order fulfilment, faster delivery timelines and better integration of Indian suppliers into global e-commerce supply chains. It also provides international e-commerce players greater flexibility in structuring their export operations, which could encourage additional investment in export-focussed warehousing, logistics, technology and fulfilment infrastructure in India.

From an industry perspective, the reform has the potential to significantly expand market access for Indian businesses, particularly MSMEs, artisans, startups and emerging manufacturers. Many smaller businesses possess quality products but lack the scale, distribution networks, and overseas market reach required to independently access global consumers. By enabling inventory-led export operations, e-commerce platforms can act as an important bridge between local producers and international demand, helping MSMEs participate more effectively in global trade without substantial upfront investments in overseas distribution channels.

Taken together, the CBIC customs reforms and the FDI liberalisation create a more seamless framework for cross-border e-commerce. While CBIC has addressed operational and compliance frictions through customs simplification, the latest FDI reform complements these efforts by unlocking investment and business model flexibility for export-oriented e-commerce. The combined impact could strengthen India’s digital export ecosystem, improve export competitiveness and accelerate the country’s ambition of emerging as a leading global e-commerce export hub.

(Bararia is Partner-Indirect Tax, Grant Thornton Bharat; Ramamurthy is Manager-Indirect Tax, Grant Thornton Bharat. Views are personal.)