India Eyes Foreign Investment in E-commerce Exports Boost

The Commerce and Industry Ministry of India is seeking feedback from government departments on a proposal to allow foreign direct investment in inventory-based e-commerce models for export-only purposes. The plan aims to enhance India's export potential, providing a new avenue for growth without affecting domestic small retailers.

The Commerce and Industry Ministry is considering a proposal to permit foreign direct investment (FDI) in the inventory-based model of e-commerce solely for export purposes, according to officials. The move aims to boost India's exports significantly while safeguarding the interests of small retailers operating locally.

Currently, FDI policies in India restrict overseas investments in inventory-based e-commerce, allowing 100% FDI on the marketplace model, as employed by companies like Amazon and Flipkart. The proposed change aims to allow inventory-based e-commerce solely for the export of India-manufactured goods, aligning with existing FDI regulations.

Experts highlight that current policies address domestic marketplace models but not export opportunities. The Directorate General of Foreign Trade initiated this proposal, now under consideration by relevant government departments, as part of efforts to enhance India's global e-commerce footprint and meet the USD 1 trillion merchandise export target by 2030.