In a move aimed at boosting e-commerce exports and expanding global opportunities for small and medium sellers, the government is set to begin consultations with the industry on creating a framework to allow inventory-based models for cross-border online trade.
The Directorate General of Foreign Trade (DGFT) has called a meeting on September 15 with key stakeholders, including Amazon, Walmart-owned Flipkart, logistics providers, and representatives from multiple government departments, sources said.
The proposal comes at a crucial time, as the United States has recently scrapped a provision that allowed tax-free import of small packages worth up to $800 — a move that has dampened growth prospects for Indian MSMEs.
At present, foreign e-commerce marketplaces in India are prohibited from holding inventory under existing FDI rules. However, the proposed framework would carve out an export-only exception. The DGFT’s agenda note reviewed by TOI said the model would involve third-party export facilitation entities linked to e-commerce platforms, which would handle compliance, logistics, and customs processes. This, it added, would allow MSMEs to focus on product quality, branding, and product development.
Although the idea has been in discussion for over a year, the timing coincides with fresh signals that India-US trade talks may soon resume. Currently, less than 10% of Indian MSMEs selling online are engaged in global exports, held back by complex paperwork, high logistics costs, and compliance barriers.
Studies cited by the government suggest that nearly 87% of enterprises onboarded for e-commerce exports between 2020 and 2024 had exited by 2025 due to operational challenges. The proposed shift could mark a significant policy deviation but is being seen as critical to India’s export growth push.
