- Why in news
- On August 5, 2026, the Commerce Ministry notified the Inventory-based Cross-border E-Commerce Export Framework under Foreign Trade Policy 2023 (Notification No. 27/2026-27 and Public Notice No. 25/2026-27).
- What it is
- This is a framework under Foreign Trade Policy 2023 for e-commerce exports from inventory held in India. It follows an FDI Policy change that permits inventory-based e-commerce only for exports. Eligible entities export through a registered Exporter-on-Record that buys from Indian Sellers-on-Record.
- Legal instruments
- Notification No. 27/2026-27 and Public Notice No. 25/2026-27, both dated August 5, 2026, operationalise the framework under FTP 2023.
- FDI link
- Press Note No. 3 (2026 Series) amended the FDI Policy to permit inventory-based e-commerce only for exports. The FTP framework follows it.
- Exporter-on-Record role
- The EOR buys from Sellers-on-Record against confirmed overseas orders, exports in its own name and is responsible for compliance with destination-country rules.
- Inventory safeguards
- Inventory may be bought only against confirmed export orders, with no speculative stocking. It must be segregated and tracked digitally, and cannot be sold domestically.
- Seller payment and rebates
- Sellers are paid within the prescribed timeline even if the overseas buyer has not paid. Rebates and refunds are passed on in proportion to FOB value.
Don’t confuse with Inventory-based vs marketplace model: In the marketplace model the platform only connects buyers and sellers and holds no stock. Inventory-based models involve the platform owning or controlling stock. Here, inventory-based activity is permitted only for exports.
Don’t confuse with Exporter-on-Record vs Seller-on-Record: The EOR is the registered entity that exports in its own name. The SOR is the Indian seller whose goods are supplied to the EOR.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- Gives MSMEs, artisans and manufacturers access to global markets without handling export paperwork and logistics themselves.
- Aligns FDI and trade policy, so foreign-funded platforms can hold export stock while domestic retail stays protected.
Problems
- Enforcing segregation of export stock and preventing diversion into the domestic market.
- Small sellers may lack bargaining power with large EORs on prices and terms.
Way forward
- Use the digital repository and annual compliance certification for strict monitoring.
- Build seller awareness and a grievance mechanism for MSMEs.
Put in your answer
Seller protection safeguards: Payment to sellers regardless of overseas buyer payment, pass-through of export rebates by FOB value, and price and shipment visibility for sellers.
- 2013Mains GS3 · Q9Impact of FDI in multi-trade retail on supply chain management.
- 2015Mains GS3 · Q6Food processing marketing bottlenecks; can e-commerce overcome them?
- 2026Mains GS3 · Q4Factors causing agri-produce marketing inefficiency; how e-commerce reduces it.
- 2010Prelims Q18Objectives of SEZ Act 2005: infrastructure, foreign investment, service exports.
- 2022Prelims Q6Can foreign-owned e-commerce firms sell own goods and own big sellers?
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: New policy under Foreign Trade Policy 2023 with Exporter-on-Record model; economy-scheme topic, but too new and detailed for confident question.
Worth revising until Prelims 2028: most news questions come within two years of the event.