The Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce & Industry, has introduced an Inventory-based Cross-border E-Commerce Facilitation Framework under the Foreign Trade Policy 2023. The framework has been notified through Notification No. 27/2026-27 dated August 05, 2026 and has come into force with immediate effect. The amendments have been issued under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with paragraph 1.02 of the Foreign Trade Policy 2023.
The new framework enables eligible e-commerce entities to undertake export-only inventory operations through an Exporter-on-Record, or EOR, registered with the DGFT. An Exporter-on-Record must hold a valid Importer Exporter Code and GSTIN and will procure goods from one or more registered Sellers-on-Record against confirmed export orders for sale to buyers located outside India.
Under the framework, a Seller-on-Record is an entity registered in India under the applicable Goods and Services Tax laws that supplies goods produced in India to the Exporter-on-Record against confirmed export orders. The goods procured and held exclusively for export will constitute “Export Inventory” and must be separately designated, recorded and traceable in the records of the Exporter-on-Record.
The objective of the framework is to facilitate e-commerce exports through an inventory model under which the Exporter-on-Record holds goods exclusively for export, undertakes export-related processes and supports Sellers-on-Record in accessing international markets. An eligible e-commerce entity, other than a marketplace e-commerce entity as defined under the Consolidated FDI Policy, may undertake such export-only inventory operations, subject to the applicable Foreign Trade Policy and FDI provisions.
Only goods of Indian origin will be eligible under the framework. The Seller-on-Record will be responsible for ensuring and declaring the correct origin of the goods in accordance with applicable laws and relevant origin criteria. The DGFT may also notify a list of goods that will not be eligible for export under the framework from time to time.
The transfer of title in goods from the Seller-on-Record to the Exporter-on-Record will be permitted only against a confirmed export order received from a buyer located outside India. Speculative transfer of title or accumulation of inventory without a confirmed export order will not be permitted.
The Exporter-on-Record will be responsible for distinctly identifying, segregating and maintaining the export inventory. It will also be required to maintain a digital repository for the identification, tracking and traceability of such goods, including records relating to procurement from the Seller-on-Record, inventory status and linkage with the relevant export documentation. The detailed manner and standards for inventory identification, segregation and digital record-keeping will be prescribed through the Handbook of Procedures.
To safeguard the interests of domestic sellers, the framework provides that the Exporter-on-Record must make payment to the Seller-on-Record promptly after acceptance or deemed acceptance of the goods and, in any case, within seven days from such acceptance. Payment to the seller cannot be made contingent upon receipt of payment from the overseas buyer, return of goods by the buyer or any other event outside the control of the Seller-on-Record.
The Exporter-on-Record will be entitled to claim eligible export rebates and refunds in accordance with the Foreign Trade Policy and other relevant notifications. Such benefits must be apportioned among the concerned Sellers-on-Record in proportion to the Free-on-Board value attributable to their respective goods, as declared in the Shipping Bill. After deduction of a permissible administrative charge, the seller-attributable export benefits will be passed on to the respective Sellers-on-Record.
The framework also assigns responsibility for reverse logistics to the Exporter-on-Record. All processes and costs relating to returned or rejected export consignments will be managed and borne by the Exporter-on-Record. Returned or rejected goods cannot, under any circumstances, be sold or supplied in the domestic market by the Exporter-on-Record, either directly or through another person or entity.
The Exporter-on-Record will, to the extent practicable, utilise the infrastructure of notified E-Commerce Export Hubs for operations under the framework, subject to the operational readiness and available capacity of such facilities.
The introduction of the framework provides a structured regulatory mechanism for export-only inventory operations in the e-commerce sector. It lays down eligibility requirements, operational responsibilities, inventory-management standards, payment safeguards, distribution of export benefits and procedures for handling returned consignments, while enabling Indian sellers to access overseas markets through registered export entities.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/08/Notif-27-English.pdf
