Revised 15 September 2026 · v1.0.0 · what changed

On 2 September 2026, India's Department of Economic Affairs quietly inserted nine lines into Schedule I of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. The change looks technical, and in the sense that it touches one numbered sub-clause of one schedule, it is. What it actually does is carve the first real hole in a wall India has held since December 2018: the flat ban on foreign-funded e-commerce companies owning the inventory they sell. The hole is narrow and deliberate — it only opens for goods being exported, never for anyone selling into the Indian market — but it is the first time this specific prohibition has moved at all.

Jawaharlal Nehru Port — the export-side infrastructure this new inventory-ownership carve-out is built to feed, since the exception only ever applies to goods leaving India. Source: Jaxer, Wikimedia Commons, CC BY 3.0.

The wall that hasn't moved since 2018

India's FDI policy for e-commerce, set out in Press Note 2 of 2018 (effective 1 February 2019) and codified into the Non-Debt Instruments Rules that took effect later that year, draws one hard line: a marketplace model — an e-commerce entity that simply operates the platform connecting buyers and sellers, without owning what's sold — can take up to 100% FDI under the automatic route. An inventory-based model — where the e-commerce entity owns the goods it sells directly to consumers — gets none. FDI in inventory-based B2C e-commerce has been expressly prohibited since that Press Note, and every amendment made to the underlying rules since then has left that specific prohibition untouched. The policy exists to stop foreign-funded platforms from competing directly against India's kirana stores and small retailers by underwriting their own stock the way a conventional retailer would.

What the 2 September notification actually inserted

The new clause, serial number 15.2.5 in Schedule I, does two things. First, it permits an e-commerce entity to run an inventory-based model, but only for exporting goods or products manufactured or produced in India, and only in line with the Foreign Trade Policy 2023, its Handbook of Procedures, and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015. Second — and this is the operative line — it explicitly states that the existing B2C and inventory-based-model restrictions do not apply to exports made under this new clause. That second line is what makes it useable: without it, a company running an inventory-owned export operation could still be read as falling foul of the general prohibition. With it, an e-commerce entity can now hold its own export inventory without that structure bleeding into, or being constrained by, the rules governing its domestic sales.

Eighteen amendments before this one

The Non-Debt Instruments Rules were first notified on 7 October 2019 and have been amended at least eighteen times since, per the notification's own recital of its history — averaging roughly one amendment every four months. Four of those eighteen landed in 2026 alone before this one, which is itself formally titled the "Fourth Amendment Rules, 2026": a rule that has been rewritten four times in nine months.

Amendment dates are transcribed from the notification's own recital of its predecessor notifications' numbers and dates; a small number of individual day-of-month digits in the OCR source were unclear and are not restated here with false precision where ambiguous.

Why an export-only carve-out, not a broader one

This amendment lands inside a larger, explicitly stated push: India's Foreign Trade Policy 2023 puts e-commerce export potential at $200–300 billion by 2030, against an overall $2 trillion export target for the same year, and has already raised the courier-route export consignment cap from ₹5 lakh to ₹10 lakh, with e-commerce export hubs and dedicated postal "Dak Niryat Kendra" facilities proposed to help smaller manufacturers and artisans reach buyers abroad. Reliable cross-border fulfilment at that kind of scale is easier to run on owned inventory — holding stock, packing to destination-market requirements, absorbing returns — than through a pure marketplace hand-off. Carving out exports from the inventory ban gives foreign-funded e-commerce operators a legal path to build that kind of logistics specifically for outbound goods, without reopening any part of the domestic-retail protection the 2018 policy was built to provide.

Sources: OCR transcript of the notification's own text (S.O. 4870(E), Ministry of Finance – Department of Economic Affairs, dated 2 September 2026, published in the Gazette of India Extraordinary the same week), via NakliTechie/sansadsaar-gazettes' GitHub-hosted index of archive.org's Gazette of India OCR corpus (itself built on Sushant Sinha's egazette archiving project) — for the operative text of clause 15.2.5 and the full list of the rule's prior amendment dates. Press Note 2 (2018 Series) and the marketplace-vs-inventory FDI framework per legal-industry analysis (Khaitan & Co, Lexology, Mondaq). Foreign Trade Policy 2023's e-commerce export figures, the courier consignment cap increase and the E-Commerce Export Hub / Dak Niryat Kendra proposals per PIB and trade-press coverage of the policy's launch.

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.