The Department of Economic Affairs under the Finance Ministry has notified changes in Foreign Direct Investment (FDI) norms to allow ecommerce firms to maintain inventory only for export purposes.
These firms must export goods manufactured or produced in India.
Also, FDI in inventory-based ecommerce retailing has not been permitted.
In a notification dated September 2, the department has added a provision to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
"An e-commerce entity is permitted to engage in an inventory-based model of e-commerce exclusively for the export of goods or products manufactured or produced in India in accordance with the 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," the provision says.
