By SSR Corporate Team
Press Note No. 3 (2026 Series), dated July 23, 2026, Department for Promotion of Industry and Internal Trade, FDI Policy Cell
INTRODUCTION
The Department for Promotion of Industry and Internal Trade (“DPIIT”), Ministry of Commerce & Industry, has issued Press Note No. 3 (2026 Series) dated July 23, 2026 (the “Press Note”)[1] , reviewing the Foreign Direct Investment (“FDI”) policy on the e-commerce sector to permit the inventory-based model of e-commerce, on a restricted basis, for exports of domestically manufactured and/or produced goods. The Press Note was issued by Dr. Jai Prakash Shivahare, Joint Secretary to the Government of India, under DPIIT F. No. P-15015/9/2025-FDI Policy dated July 23, 2026.
This Press Note is the foundational policy change underpinning the DGFT’s subsequent rollout of the Inventory-based Cross-border E-Commerce Facilitation Framework — namely, Notification No. 27/2026-27[2] and Public Notice No. 25/2026-27[3] , both dated August 5, 2026, covered in Parts II and I respectively of this series. Notification No. 27/2026-27 expressly cross-refers to “Para 5.2.15.2.5 of Consolidated FDI Policy as amended vide Press Note No. 3 (2026 Series) dated 23.07.2026” as the source of the FDI liberalisation that enables e-commerce entities to undertake export-only inventory operations under the DGFT Framework.
BACKGROUND
Under the Consolidated FDI Policy Circular of 2020[4] dated October 15, 2020, as amended from time to time (the “FDI Policy”), FDI is permitted in the Business-to-Business (B2B) and marketplace models of e-commerce, but is not permitted in the Business-to-Consumer (B2C) e-commerce model or the inventory-based model of e-commerce, where inventory of goods and services is owned by the e-commerce entity and sold directly to consumers.
With a view to facilitating greater exports through easier and increased access to global markets by Indian sellers, DPIIT has reviewed the FDI Policy and decided that the 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.
KEY REGULATORY REQUIREMENTS
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New Para 5.2.15.2.5 — Inventory-Based Model of E-Commerce Exclusively for Exports
A new paragraph is inserted under Para 5.2.15.2 of the FDI Policy, reading as follows:
- An e-commerce entity is permitted to engage in the 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.
- The restrictions on the B2C and inventory-based model of e-commerce stipulated under Para 5.2.15.2.1 to Para 5.2.15.2.4 of the FDI Policy shall not apply to the export of goods/products through e-commerce as permitted under the new Para 5.2.15.2.5(i).
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Effective Date
The decision is stated to take effect from the date of the corresponding FEMA notification.[5]
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Consequential Action Directed by the Press Note
- The Joint Secretary, Department of Economic Affairs, has been asked to suitably incorporate the policy changes in the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 , the relevant schedules thereof, and the FIRMS portal.
- The Reserve Bank of India, Foreign Exchange Department, has similarly been asked to incorporate the policy changes in the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019[6], the relevant schedules thereof, and the FIRMS portal.
- The Press Information Officer has been asked to give wide publicity to the Press Note, and the NIC Section, DPIIT, has been asked to upload it on DPIIT’s website.
ANALYSIS
Significance for E-Commerce Entities with Foreign Investment
This Press Note is the source of the FDI liberalisation without which the DGFT’s Inventory-based Cross-border E-Commerce Facilitation Framework could not extend to e-commerce entities with foreign investment. Prior to this amendment, an e-commerce entity with FDI could not itself own or hold inventory of goods for sale — whether to domestic consumers (B2C) or, on a plain reading of the erstwhile restriction, potentially even for export purposes structured as an inventory model. The new Para 5.2.15.2.5 carves out a narrow, export-only exception: an e-commerce entity with FDI may now hold inventory, but only of goods manufactured or produced in India, and only for export. Critically, as Notification No. 27/2026-27 subsequently clarified, an e-commerce entity availing of this carve-out must undertake such operations through a separate legal entity incorporated for the purpose, and must disclose its shareholding pattern and the nature of its ownership or control relationship with the e-commerce entity at the time of registration (or amendment) as an Exporter-on-Record. Entities structuring such operations should treat the FDI Policy carve-out and the DGFT registration/disclosure requirements as an integrated compliance exercise rather than two separate approvals.
Timing and Sequencing
Clients should note the sequencing across the three instruments in this series: the FDI Policy carve-out (this Press Note, dated July 23, 2026) came first, followed roughly two weeks later by the DGFT’s substantive FTP amendment (Notification No. 27/2026-27) and its accompanying operational Public Notice (No. 25/2026-27), both dated August 5, 2026. Since the Press Note ties its own effective date to a further FEMA notification, entities should confirm that the underlying FEMA amendment (to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019) has in fact been issued before treating the FDI carve-out as operative, notwithstanding that the DGFT Framework itself has already been notified with immediate effect.
CONCLUSION
Press Note No. 3 (2026 Series) is the policy trigger for India’s new inventory-based cross-border e-commerce export regime, opening a narrow, export-only exception to the long-standing FDI restrictions on inventory-based e-commerce. Read together with Notification No. 27/2026-27 and Public Notice No. 25/2026-27 (Parts II and I of this series), it completes the regulatory picture: the FDI Policy basis for foreign-invested e-commerce entities to participate, the FTP framework governing Exporters-on-Record and Sellers-on-Record, and the operational procedures for registration and compliance. E-commerce entities with foreign investment considering export-only inventory operations are advised to verify the status of the corresponding FEMA notification and to structure their proposed operations, corporate arrangements, and disclosures consistently across all three instruments.
For further information or assistance in relation to the FDI Policy carve-out for inventory-based e-commerce exports or the related DGFT Framework, please reach out to S.S. Rana & Co.
[1] https://www.dpiit.gov.in/static/uploads/2026/07/ceb0cae74fd4e83094dc6b50c3d53f92.pdf
[4] https://www.dpiit.gov.in/static/uploads/2025/07/6457fc2703ee6082366c4a958b6473a8.pdf
[5] FEMA notification is not publicly available, please verify its content before relying on the data.