Press Note is issued by the FDI Policy Cell, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India. As per the Consolidated FDI Policy Circular of 2020, FDI is permitted in Business to Business (B2B) e-commerce and marketplace model of e-commerce, and is not permitted in Business to Consumer (B2C) e-commerce and inventory-based model of e-commerce where inventory of goods and services is owned by the e-commerce entity and sold directly to consumers. The Press Note states that the FDI Policy has been reviewed and that restrictions on the inventory-based model of e-commerce shall not apply in the case of exports of domestically manufactured and/or produced goods/products.

A new Para 5.2.15.2.5, titled “Inventory-Based Model of E-Commerce Exclusively for Exports,” is proposed to be inserted under the FDI Policy, reading verbatim:

“(i) An e-commerce entity is permitted to engage in inventory-based model of e-commerce exclusively for the export of goods/products manufactured and/or produced in India as per the applicable provisions of the Foreign Trade Policy 2023 read with the Handbook of Procedures (HBP) and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, as amended from time to time.

(ii) The restrictions on B2C and the inventory-based model of e-commerce stipulated under the provisions of Para 5.2.15.2.1 to Para 5.2.15.2.4 above, shall not apply to the export of goods/products through e-commerce as permitted under Para 5.2.15.2.5(i) above.”

The Press Note states that the above decision will take effect from the date of the FEMA notification.