An ecommerce company with foreign investment that seeks to undertake inventory-based operations exclusively for exports can procure goods only against confirmed export orders, as speculative stockpiling for outbound shipments is not permitted, according to a notification.
On July 23, the government permitted FDI (foreign direct investment) in an inventory-based ecommerce model exclusively for export purposes to boost India's outbound shipments.
These firms will have to export goods manufactured or produced in India.
Notifying norms for the implementation of this decision, the Directorate General of Foreign Trade (DGFT) said an ecommerce company, with foreign investment, will have to register as an 'exporter-on-record' (EOR) with the government to keep goods in stock only for exports through the online medium.
It also said that eligible ecommerce entities can undertake export-only inventory operations through a registered EOR.
