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| New DGFT framework allows exporters to hold inventory for e-commerce exports |
Inventory-Based E-Commerce Exports
in India: DGFT New Rule Explained (2026)
📌 Source: DGFT Notification No. 27/2026-27 | Date: 5 August 2026
India has introduced a major change in e-commerce exports. Exporters can now use an inventory-based model, allowing them to store goods and sell directly to international buyers
The Central Government has amended the Foreign Trade Policy 2023 to introduce the Inventory-based Cross-border E-Commerce Facilitation Framework, under powers conferred by Section 5 of the FT(D&R) Act, 1992 read with Para 1.02 of FTP 2023.
📌 Why this matters
- New export model: Businesses can now hold inventory for exports.
- Better control: Exporters manage pricing, logistics, and buyers directly.
- Faster scaling: Easier to expand through global e-commerce platforms.
Definitions under the Framework
| Term | Meaning |
|---|---|
| Exporter-on-Record (EOR) | Entity holding valid IEC and GSTIN, registered with DGFT under this Framework, exporting goods procured from one or more Sellers-on-Record to buyers outside India. If an e-commerce entity proposes export operations under Para 5.2.15.2.5 of the Consolidated FDI Policy, this must be through a separate legal entity, disclosing its shareholding pattern and ownership/control relationship with the e-commerce entity. |
| Seller-on-Record (SOR) | GST-registered Indian entity supplying goods it produced to the EOR against confirmed export orders, for export to buyers outside India. |
| Export Inventory | Goods procured by the EOR from an SOR against a confirmed export order, held exclusively for export, and designated, recorded and traceable in the EOR's records as export-designated stock. |
| Domestic Inventory | Goods held by the Seller-on-Record for supply in the Domestic Tariff Area (DTA). |
| Export Rebates and Refunds (ERR) | Cash or cash-equivalent export incentives received by the EOR — Duty Drawback, RoDTEP, RoSCTL, or any other notified scheme with direct monetary/transferable benefit. Excludes non-transferable instruments like Advance Authorisation or EPCG. GST refunds to the EOR are the EOR's own entitlement, not shared with the seller. |
Objective of the Framework
This framework allows exporters to hold inventory and sell through e-commerce more efficiently, undertakes export-related processes, exports goods, and assists Sellers-on-Record in accessing global markets.
Eligibility & Conditions for Holding Export Inventory
- An e-commerce entity, other than a marketplace e-commerce entity (as defined under the Consolidated FDI Policy), may undertake export-only inventory operations through a registered EOR.
- Only goods of Indian origin are eligible. The Seller-on-Record is responsible for ensuring and declaring correct origin.
- A list of ineligible goods may be notified by DGFT from time to time.
- Title to goods passes from SOR to EOR only against a confirmed export order from a buyer outside India. Speculative transfer of title or inventory build-up without a confirmed order is not permitted.
Industries that benefit the most
- 🎨 Handicrafts & home decor — small-batch sellers gain formal payment protection without needing their own export license.
- 👗 Apparel & fashion accessories — high-return category; reverse logistics costs now sit with the EOR, not the seller.
- 🌿 Beauty, personal care & Ayurveda/wellness — origin and compliance responsibility is now clearly placed on the EOR before export.
Export Inventory Management & Segregation
The EOR must distinctly identify, segregate and maintain Export Inventory, and maintain a digital repository enabling identification, tracking and traceability of all Export Inventory — including procurement records from the SOR, inventory status, and linkage with export documentation.
Payment & Export Rebates and Refunds
| Rule | Detail |
|---|---|
| Payment to SOR | Promptly on acceptance/deemed acceptance of goods, and no later than 7 days — not contingent on buyer payment, returns, or any other event outside the SOR's control |
| ERR apportionment | Disbursed among Sellers-on-Record in proportion to the FOB value of their goods in that Export Consignment, as declared in the Shipping Bill |
| Admin charge | EOR may retain an administrative charge from ERR; the balance is the Seller-attributable Export Benefit, due to the SOR |
| Pass-through trigger | Becomes operative only once the EOR has actually claimed ERR for that consignment |
Reverse Logistics & Returned Consignments
- The EOR owns and manages all reverse logistics for returned/rejected consignments.
- Returned or rejected goods can never be sold or supplied in the domestic market by the EOR, directly or through anyone else.
- Reverse logistics costs are borne entirely by the EOR.
Utilisation of E-Commerce Export Hubs
The EOR shall, to the extent practicable, use notified E-Commerce Export Hub (ECEH) infrastructure, subject to operational readiness and available capacity.
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📚 Also Read
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- 👉 India Just Rewrote Its Export Policy for 190+ Products
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Disclaimer: Sourced from DGFT Notification No. 27/2026-27 dated 5 August 2026, Ministry of Commerce & Industry. This post is for informational purposes only.