Ecommerce Exports: Can the New FDI Plan Boost India’s Export Story?

India is exploring a significant policy shift that could reshape its export landscape. The Ministry of Commerce is considering allowing FDI-backed ecommerce companies to operate an inventory-based model - but strictly for exports.

If implemented, this would mark a major departure from India’s existing ecommerce rules.

The Current Ecommerce Model

Today, foreign ecommerce players in India can only operate as marketplaces. This means:

• They can connect sellers to buyers
• But they cannot hold inventory
• And they cannot sell goods directly

So, companies like Amazon or Walmart-Flipkart can only run a marketplace if they want to bring in FDI.

This restriction was introduced years ago to create a level playing field for Indian sellers. But now, the government may carve out a special exception - allowing global ecommerce platforms to adopt an inventory-led model exclusively for exports.

What Does This Change Signal?

Global ecommerce players have been lobbying for this flexibility for years. Their argument:

• Indian players can run inventory-led models
• But foreign-funded entities cannot
• This limits efficiency
• And hurts India's export potential

If approved, companies will be allowed to:

• Hold inventory meant only for export markets
• Bring in FDI targeted at supply chains for global buyers
• Build faster, more reliable fulfilment networks for international customers

For the first time, global ecommerce platforms could directly stock and ship Indian-made products abroad.

Why Is India Betting Big on This?

The contrast with China is hard to ignore.

• India’s ecommerce exports: ~$2 billion
• China’s ecommerce exports: ~$350 billion

That’s a 175x difference.

India wants to grow overall exports to $1 trillion by 2030, but with the latest US tariff pressures and slowing global trade, the target now looks harder.

Allowing inventory-led exports is a bid to:

• Reduce friction for ecommerce exporters
• Build scale in India’s MSME-driven product categories
• Attract global supply chain investments
• Narrow the gap with China

The government believes this shift can fast-track the next leg of export growth.

The Challenges: Execution Won’t Be Easy

The ambition is bold, but the road is long.

• Infrastructure gaps: India has improved significantly, but matching China’s integrated ports-logistics-supply chain ecosystem remains a long-term project.
• Export base is small: India’s total exports are under $500 billion, and ecommerce exports form a tiny fraction.
• Product complexity: China exports across categories - electronics, machinery, appliances, consumer goods. India’s ecommerce exports are still dominated by low-value MSME products, making scale harder.
• Global buyers need strong reasons to shift from China: Cost, reliability, consistency, and speed - India will need to deliver convincingly on all four.

The new FDI pathway is a promising enabler, but it must be paired with logistics reforms, ease-of-doing-business improvements, and stronger export support systems.

Final Thoughts

Allowing inventory-led ecommerce solely for exports could be a meaningful policy breakthrough. It removes a long-standing bottleneck for global players and can help Indian sellers reach more overseas buyers.

But translating this policy into a large-scale export engine will require:

• Better infrastructure
• Strategic industry support
• And coordinated effort across ministries

India can absolutely grow its ecommerce export base - but the jump from $2 billion to China’s $350 billion won’t happen overnight.

Disclaimer: This article is intended to provide a neutral overview of policy developments and their potential implications. It does not constitute financial, legal, or investment recommendations.