How India’s New Inventory-Based E-Commerce Export Framework Works for Businesses

India’s decision to allow foreign-funded e-commerce companies to own inventory of Indian-manufactured goods exclusively for export is an essential policy shift for cross-border e-commerce. Following the FDI policy amendment announced through DPIIT’s Press Note 3 (2026), the DGFT operationalized the new export model on August 5, 2026, by issuing the registration, operational, and compliance framework. 

The Directorate General of Foreign Trade (DGFT) operationalized the new inventory-based export model for foreign-funded e-commerce platforms by issuing Notification No. 27/2026-27 and Public Notice No. 25/2026-27 on August 5, 2026. The notification incorporates the Inventory-based Cross-border E-Commerce Facilitation Framework into the Foreign Trade Policy (FTP) 2023, while the public notice amends the Handbook of Procedures (HBP) 2023 to establish the registration process, operational procedures, and compliance requirements for eligible businesses.

The 2026 framework defines eligibility criteria for participation, establishes rules for procuring and managing export inventory, assigns responsibilities to e-commerce operators and Indian suppliers, and sets out the compliance safeguards businesses must follow throughout the export lifecycle.

How does the inventory-based export model work in India?

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As stated in the notification, this framework places a registered Exporter-on-Record (EOR) at the center of every export transaction. EOR serves as the legal entity responsible for purchasing goods from Indian manufacturers or suppliers, maintaining export inventory, and managing the entire export process on behalf of overseas customers.

It oversees every stage of the transaction, including customs clearance, export documentation, shipping and logistics, payment collection, export incentive claims, and reverse logistics, where applicable.

India’s 2026 inventory-based export model operates through the following five stages:

1. An overseas buyer places an order through an eligible e-commerce platform.
2. EOR receives the confirmed order and procures the goods from an Indian manufacturer or supplier (Seller-on-Record).
3. It then designates the goods as export inventory, records them in its digital inventory system, and stores them exclusively for export.
4. EOR completes all export formalities, including customs clearance, shipping, and regulatory documentation.
5. Lastly, EOR fulfills all post-export obligations, including paying Indian suppliers, distributing eligible export incentives, and managing reverse logistics for returned or rejected goods, where applicable.

Top 10 Frequently Asked Questions: India’s inventory-based e-commerce export

1. Who can participate in India’s inventory-based cross-border e-commerce export framework?

Businesses seeking to undertake inventory-based cross-border e-commerce exports must register with the DGFT as an EOR. The framework also establishes the SOR, which supplies Indian-origin goods to the EOR. Together, these entities form the operating structure for inventory-based e-commerce exports.

2. How can businesses register as an EOR?

Businesses must apply for registration by submitting Aayaat Niryat Form (ANF) 9A to the DGFT. The application requires details such as the applicant’s Import-Export-Code (IEC), goods and services tax (GST) registration, ownership structure, export operations, warehouse locations, and relationship with the associated e-commerce platform. Registered entities must also notify the DGFT of material changes to their registration details to maintain eligibility under the framework.

3. What responsibilities do the EOR assume?

EOR serves as the legal entity responsible for managing the export transaction. Its responsibilities extend beyond procuring inventory to include export documentation, customs compliance, destination-country regulatory compliance, export incentive claims, supplier payments, inventory management, and reverse logistics.

4. Can businesses build export inventory before receiving customer orders?

No. The framework permits companies to procure inventory only against confirmed export orders received from overseas buyers. This restriction prevents speculative stockpiling and ensures that inventory acquired under the framework remains dedicated exclusively to exports.

5. How must businesses manage export inventory?

Businesses must maintain export inventory separately from inventory intended for domestic sales. The framework also requires the EOR to maintain digital records that link procurement, GST invoices, and export documentation, enabling authorities to trace goods throughout the export process.

6. Who is responsible for complying with destination-country regulations?

The framework places responsibility for destination-market compliance on the EOR. Businesses must ensure exported products satisfy applicable testing, certification, licensing, packaging, labelling, product registration, and other regulatory requirements before entering overseas markets.

7. How does the framework protect Indian manufacturers and suppliers?

The framework introduces several safeguards for Indian suppliers. It requires the EOR to make timely payments, share eligible export incentives in accordance with prescribed rules, and provide greater visibility in export transactions. This can be done by providing digital information relating to order status, shipments, and overseas sales.

8. What happens to returned or rejected export goods?

The EOR remains responsible for managing reverse logistics throughout the export lifecycle. Returned or rejected goods may be re-exported, returned to the supplier, destroyed, or otherwise disposed of as permitted under the framework. Export inventory cannot be diverted into the domestic market.

9. What ongoing compliance obligations apply after registration?

Registration is only the beginning of the compliance process. The framework requires the EOR to obtain an annual compliance certificate from an eligible professional, maintain operational records for 5 years, preserve those records even after registration is cancelled or surrendered, and submit compliance certifications to the DGFT within the prescribed timelines.

10. What are the biggest operational changes under the inventory-based export?

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India’s cross-border e-commerce exports framework transforms inventory-based exports into a regulated operating model. It introduces mandatory registration, defined roles for EOR and SOR, restrictions on speculative inventory, digital inventory traceability, supplier protection measures, reverse logistics requirements, and continuing compliance obligations. Businesses adopting the model must integrate these requirements into their export, logistics, finance, and compliance functions.

11. How are disputes between the EOR and SOR resolved?

The framework establishes a formal grievance mechanism for resolving disputes between the EOR and SOR. Parties may file complaints with the relevant DGFT Regional Authority, which will attempt to resolve the matter within 30 days. If the dispute remains unresolved, the DGFT may refer it to its headquarters for further consideration.

What should businesses do next?

Businesses interested in adopting the inventory-based cross-border e-commerce export model should assess whether their existing operating model, corporate structure, and export processes align with the new DGFT framework. This includes evaluating whether to establish a dedicated EOR, reviewing supplier and logistics arrangements, and identifying operational changes needed to support inventory-based exports.

Companies should also conduct a gap assessment of their internal systems and contractual arrangements to ensure they can meet the framework’s operational and compliance requirements before commencing exports. Early preparation will help businesses integrate the new model efficiently while reducing implementation and regulatory risks.

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