New framework under FTP 2023 allows export-only inventory operations through registered Exporter-on-Record entities, creating a structured route for Indian MSMEs and manufacturers to access global e-commerce markets
NEW DELHI, August 9, 2026: The Government of India has operationalised a new Inventory-based Cross-border E-Commerce Export Framework under the Foreign Trade Policy (FTP), 2023, opening a regulated pathway for Indian manufacturers, artisans, traders and MSMEs to participate in global e-commerce markets.
The framework has been operationalised through Notification No. 27/2026-27 and Public Notice No. 25/2026-27, both issued on August 5, 2026.
The move follows the Government’s amendment to the FDI Policy through Press Note No. 3 (2026 Series), which permits inventory-based e-commerce operations exclusively for exports. The latest framework establishes the corresponding trade-policy and procedural mechanism for such operations.
Exporter-on-Record to become the key link
Under the new framework, eligible e-commerce entities can undertake export-only inventory operations through a registered Exporter-on-Record (EOR).
The EOR will procure goods from Indian Sellers-on-Record (SORs) against confirmed overseas orders and export the goods in its own name. The EOR will also assume responsibility for export operations and compliance with applicable requirements in the destination country.
For Indian sellers, this could significantly reduce the operational complexity traditionally associated with entering international markets.
The EOR model can cover a range of activities, including:
- Export documentation and customs formalities
- Destination-country regulatory compliance
- Product testing and certification
- Packaging and labelling
- International fulfilment and logistics
- Reverse logistics
- Export-related operational requirements
This allows Indian businesses to concentrate on manufacturing, product development and innovation while an organised export intermediary manages much of the international fulfilment and compliance burden.
Confirmed orders required; speculative export inventory restricted
A major feature of the framework is the restriction on speculative inventory accumulation.
Export inventory can be procured only against confirmed export orders. This means businesses cannot use the framework to build up large quantities of inventory speculatively for potential overseas sales.
The Government has also introduced traceability requirements. Export inventory must be distinctly identified, segregated and maintained through a digital repository.
Such inventory cannot subsequently be diverted for sale in the domestic market.
These provisions are designed to create a clear separation between export inventory and domestic-market inventory while giving regulators greater visibility over the movement of goods.
Payment protection for Indian sellers
The framework also addresses one of the important concerns faced by Indian sellers participating in international e-commerce—the timing and transparency of payments.
Indian Sellers-on-Record are required to receive payment within the prescribed timeline, irrespective of when the overseas buyer’s payment is received.
The framework further provides for the pass-through of eligible export rebates and refunds to sellers in proportion to the FOB value attributable to their goods.
Sellers will also receive visibility into important aspects of their international sales, including the final sale price, order status and shipment tracking.
Rules for returned and rejected shipments
Cross-border e-commerce inevitably involves product returns and rejected shipments. The new framework establishes procedures for dealing with such inventory.
Returned or rejected consignments must either be:
- Re-exported;
- Returned to the Indian seller; or
- Disposed of in accordance with the prescribed procedures.
The framework also introduces annual compliance certification and requires digital record maintenance, strengthening the audit trail and regulatory oversight of inventory-based exports.
What it could mean for Indian MSMEs
For India’s MSME and manufacturing ecosystem, the significance of the framework goes beyond another export procedure.
One of the persistent barriers to cross-border e-commerce for smaller businesses has been the complexity of international trade compliance. Product certification, customs procedures, packaging requirements, overseas fulfilment, returns and destination-country regulations can make direct international selling difficult for smaller enterprises.
The EOR structure potentially changes that equation by allowing Indian sellers to participate in global e-commerce through an organised export infrastructure.
For an MSME with a competitive product but limited international logistics and compliance capabilities, the model could provide a relatively structured route into overseas markets.
A potential boost to India’s cross-border e-commerce ecosystem
The Government’s latest move comes at a time when digital commerce is increasingly becoming an important channel for international market access.
Indian manufacturers, artisans and MSMEs can potentially use cross-border e-commerce to reach overseas consumers without establishing a full physical distribution network in every target market.
The new framework seeks to combine that commercial opportunity with safeguards around inventory, payments, export benefits and traceability.
The policy therefore represents an attempt to build a more organised ecosystem in which Indian sellers, export intermediaries and global e-commerce demand can operate within a defined regulatory framework.
The Exim Times Perspective
The real test of the framework will be its implementation on the ground.
For Indian MSMEs, the value of the policy will ultimately depend on how easily they can connect with compliant Exporter-on-Record entities, access overseas demand, understand destination-market requirements and receive transparent settlement of their export proceeds and benefits.
If effectively implemented, the framework could help move cross-border e-commerce from an opportunity available primarily to digitally mature exporters towards a broader export channel for India’s MSMEs, manufacturers, artisans and emerging brands.
For India’s export ambitions, the development is significant: rather than requiring every small producer to build an independent international trade infrastructure, the EOR model could allow specialised export networks to provide the compliance and fulfilment backbone needed to take Indian products to global consumers.
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2294775®=48&lang=1
