India Operationalises Inventory-Based Cross-Border E-Commerce Export Framework

The Government of India has formally introduced an inventory-based framework for cross-border e-commerce exports, creating a regulated mechanism through which Indian-manufactured goods can be sold and delivered to international customers using organised global fulfilment networks.

The framework has been operationalised under the Foreign Trade Policy 2023 through Notification No. 27/2026-27 and Public Notice No. 25/2026-27, both issued on August 5, 2026.

The new system permits eligible e-commerce entities to maintain inventory exclusively for export purposes. It is designed to help Indian manufacturers, artisans, traders and micro, small and medium enterprises reach overseas customers without having to independently manage the complex documentation, logistics and regulatory obligations associated with international trade.

Exporter-on-Record to Manage Overseas Transactions

At the centre of the framework is the concept of a registered Exporter-on-Record, or EOR.

Under the arrangement, the EOR may purchase products from recognised Indian Sellers-on-Record after receiving confirmed orders from foreign customers. The EOR will then export the products in its own name and assume responsibility for the entire export transaction.

This responsibility includes customs documentation, shipping formalities, destination-country regulations, product testing, certification, packaging, labelling, logistics, fulfilment and the handling of returned consignments.

The system allows Indian producers to focus primarily on manufacturing, product development and innovation while relying on specialised export entities to manage overseas compliance and delivery operations.

The framework follows the amendment made to India’s Foreign Direct Investment Policy through Press Note No. 3 of the 2026 Series, which permitted inventory-based e-commerce operations when conducted exclusively for exports.

Confirmed Overseas Orders Made Mandatory

The Government has introduced safeguards to prevent export inventory operations from affecting the domestic retail market.

Goods may be procured and maintained as export inventory only against confirmed orders received from customers outside India. E-commerce entities will not be permitted to accumulate speculative inventory without corresponding overseas demand.

The export inventory must be separately identified and physically segregated from other goods. Details of the inventory must also be maintained in a digital repository, allowing authorities to trace each product through the procurement, storage, export and delivery process.

Products procured under the export-only inventory framework cannot be diverted for sale in India.

These conditions are intended to ensure that the system remains focused entirely on exports and does not become an indirect route for inventory-based domestic e-commerce operations.

Timely Payment Protection for Indian Sellers

The framework includes specific provisions to protect Indian manufacturers and sellers from delayed payments.

The Exporter-on-Record must pay the Indian Seller-on-Record within the prescribed period, regardless of whether payment has been received from the overseas customer.

This provision reduces the risk faced by small manufacturers and MSMEs, which may otherwise have to wait for the completion of international payment cycles or bear losses arising from delayed payments by foreign buyers.

Indian sellers must also be given access to information regarding the final overseas selling price of their goods, the status of the order and shipment-tracking details.

The transparency requirements are intended to provide sellers with a clearer understanding of how their products are being marketed and sold internationally.

Export Benefits to Be Passed on to Sellers

Export rebates, refunds and other eligible benefits associated with the exported products must be apportioned and passed on to the respective Sellers-on-Record.

The distribution of these benefits will be calculated according to the free-on-board value attributable to the goods supplied by each seller.

This requirement ensures that Indian manufacturers and MSMEs receive their appropriate share of export incentives, even when the export transaction is formally conducted by the Exporter-on-Record.

Rules Introduced for Returns and Rejected Shipments

The framework also establishes procedures for products returned by overseas buyers or rejected during the export process.

Such goods must either be re-exported, returned to the original Indian seller or disposed of in accordance with the prescribed regulations.

The Exporter-on-Record will be responsible for managing reverse logistics and maintaining the necessary records relating to returned or rejected consignments.

Annual compliance certification has also been made mandatory. Export entities must maintain digital records capable of demonstrating compliance with inventory, payment, traceability and export-related requirements.

Opportunity for Indian MSMEs and Artisans

Cross-border e-commerce has emerged as an important route for smaller enterprises seeking to access international markets without establishing their own overseas distribution networks.

However, many Indian MSMEs and artisans face difficulties relating to customs documentation, product certification, international packaging requirements, foreign consumer regulations and reverse logistics.

The inventory-based export framework seeks to address these challenges by allowing specialised entities to aggregate products from Indian sellers and manage their international sale and fulfilment.

Organised inventory and fulfilment systems could also shorten delivery times for overseas customers, improve shipment tracking and help Indian products compete more effectively on global e-commerce platforms.

Strengthening India’s Digital Export Ecosystem

The new policy represents an effort to combine the efficiency of inventory-based e-commerce with safeguards protecting Indian producers and the domestic market.

Confirmed-order requirements, segregated inventory, digital tracking, seller-payment timelines, transparent pricing and mandatory pass-through of export benefits are expected to provide greater accountability across the supply chain.

By reducing the procedural burden on manufacturers while assigning clear responsibility to registered exporters, the framework could support wider participation by Indian businesses in global digital commerce.

The Government expects the system to expand international market access for Indian-made products, strengthen organised export fulfilment networks and enable more MSMEs, traders and artisans to become part of global e-commerce supply chains.

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Reference

Press Information Bureau, Government of India
“Government Notifies Inventory-based Cross-border E-Commerce Export Framework under Foreign Trade Policy 2023”
Published: August 5, 2026
Notification No. 27/2026-27 dated August 5, 2026
Public Notice No. 25/2026-27 dated August 5, 2026

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