FDI Policy in E-Commerce
Marketplace vs Inventory-Based Model
India's FDI policy for e-commerce distinguishes between two models: the "marketplace model," where the platform is a facilitator between independent buyers and sellers and does not itself own inventory, and the "inventory-based model," where the e-commerce entity owns and sells its own inventory directly to consumers. FDI treatment differs sharply between the two.
- Press Note 3 of 2016 (DPIIT, then DIPP) permitted 100% FDI under the automatic route in the marketplace model of e-commerce, provided the platform does not exercise ownership/control over inventory
- Press Note 2 of 2018 tightened marketplace-model rules to prevent indirect control — barring platforms (and their group companies) from selling through vendors in which they hold an equity stake, and prohibiting exclusive-sale arrangements
- 100% FDI in the inventory-based model has, until now, been generally prohibited, except where the e-commerce entity deals exclusively in export of goods manufactured/produced in India
- The 2026 amendment extends and clarifies this export-only inventory-based exception to explicitly cover MSME, artisan, farmer, and fisherman-produced goods intended for cross-border sale, without opening domestic inventory-based retail to FDI
● Tracked since July 23, 2026 · last seen August 07, 2026 · updates as the daily brief publishes
See it in today’s brief.
Daily current affairs with every static concept explained in place.
Read the daily brief