For years, India’s foreign direct investment policy permitted foreign investment in the marketplace model of e-commerce but kept inventory-led business-to-consumer e-commerce outside the permitted framework. That position has now been relaxed, but only for exports. The framework allows an export-focused e-commerce business to act as the substantive exporter rather than merely facilitating a transaction between an Indian seller and an overseas buyer. It can take responsibility for procurement, export execution, export benefits and returns, while the domestic seller receives a time-bound payment obligation. At the same time, the domestic prohibition on foreign-invested inventory-based business-to-consumer e-commerce remains intact.
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