India's New Inventory-Based Cross-Border E-Commerce Export Framework: What Exporters Need to Know

India has introduced a significant policy reform for cross-border e-commerce exporters through DGFT Notification No. 27/2026-27 dated 5 August 2026. The notification amends the Foreign Trade Policy (FTP) 2023 by introducing an Inventory-based Cross-border E-Commerce Facilitation Framework with immediate effect.

The framework provides a structured mechanism for inventory-led export operations through registered Exporters-on-Record (EORs) while ensuring traceability, compliance, and transparency. It defines the responsibilities of exporters and domestic suppliers, establishes inventory management requirements, and prescribes operational rules for export-only inventory.

This development is expected to strengthen India’s cross-border e-commerce ecosystem by creating a standardized compliance framework for businesses exporting products through inventory-based models.

What Is the Inventory-Based Cross-Border E-Commerce Export Framework?

The newly introduced framework enables eligible businesses to maintain inventory exclusively for exports under a regulated model.

Instead of exporting directly from multiple domestic suppliers, a registered Exporter-on-Record (EOR) can procure goods from one or more Indian suppliers and export them to overseas buyers under a clearly defined compliance framework.

The framework has been introduced under the Foreign Trade Policy (FTP) 2023 with immediate effect.

Who Can Operate Under This Framework?

Exporter-on-Record (EOR)

An Exporter-on-Record is an entity that:

  • Holds a valid IEC and GST registration.
  • Is registered with DGFT under this framework.
  • Procures goods from one or more Sellers-on-Record.
  • Exports those goods to buyers located outside India.
  • Must disclose ownership and shareholding details where required under the applicable FDI policy.

Seller-on-Record (SOR)

A Seller-on-Record refers to an Indian GST-registered supplier that supplies domestically manufactured goods to the Exporter-on-Record against confirmed export orders.

Key Features of the Framework

1. Export-Only Inventory

The framework introduces the concept of Export Inventory, which consists of goods procured specifically against confirmed export orders.

These inventories:

  • Must remain exclusively for exports.
  • Cannot be maintained for speculative stocking.
  • Must be separately identified and fully traceable.

2. Mandatory Inventory Segregation

Exporters must maintain complete segregation between:

  • Export Inventory
  • Domestic Inventory

Businesses are also required to maintain a digital repository capable of tracking every export-designated item from procurement to shipment.

3. Digital Traceability

The Exporter-on-Record must maintain records covering:

  • Procurement details
  • Inventory movement
  • Inventory status
  • Export documentation linkage

The detailed operational standards will be prescribed through the Handbook of Procedures (HBP).

4. Timely Payment to Domestic Suppliers

The framework mandates that the Exporter-on-Record must make payment to the Seller-on-Record promptly after acceptance (or deemed acceptance) of goods and, in any event, within the prescribed timeline mentioned in the framework.

This provides greater certainty for Indian manufacturers supplying goods for exports.

5. Export Rebates and Refunds

The notification clearly defines Export Rebates and Refunds (ERR).

These include benefits such as:

  • Duty Drawback
  • RoDTEP
  • RoSCTL
  • Other notified cash or transferable export incentive schemes

The framework also clarifies that GST refunds available to the Exporter-on-Record remain the entitlement of the Exporter-on-Record.

6. Rules for Returned Export Goods

The framework imposes strict conditions on returned or rejected consignments.

Returned export goods:

  • Cannot be sold in the domestic market.
  • Cannot be supplied through another entity.
  • Reverse logistics costs must be borne by the Exporter-on-Record.

7. Use of E-Commerce Export Hubs

Where operationally feasible, exporters are encouraged to utilize notified E-Commerce Export Hubs (ECEHs) for export operations under this framework.

Compliance Requirements for Businesses

Businesses intending to operate under this framework should ensure they have:

Registration Readiness

  • Valid IEC
  • GST registration
  • Registration as Exporter-on-Record

Inventory Controls

  • Separate export inventory
  • Digital inventory tracking
  • Stock traceability

Documentation

  • Procurement records
  • Export order linkage
  • Shipping documentation
  • Inventory movement records

Governance

  • Compliance with FTP provisions
  • Compliance with FDI requirements where applicable
  • Maintenance of ownership disclosures where required

Note:

The framework became effective immediately upon issuance of DGFT Notification No. 27/2026-27 dated 5 August 2026. Businesses planning to adopt an inventory-led export model should review their operational processes, inventory systems, documentation practices, and digital record-keeping to ensure alignment with the new requirements.

How This Framework Benefits Cross-Border E-Commerce

The introduction of this framework provides several advantages:

  • Greater regulatory clarity for inventory-based exports.
  • Standardized responsibilities for exporters and suppliers.
  • Improved traceability throughout the export supply chain.
  • Better compliance through digital inventory management.
  • Enhanced transparency in export incentive eligibility.
  • Stronger governance for cross-border e-commerce operations.

Conclusion

The Inventory-based Cross-border E-Commerce Facilitation Framework marks an important step in modernizing India’s export ecosystem. By formally recognizing inventory-based export operations and prescribing clear compliance requirements, the Government aims to facilitate cross-border e-commerce while maintaining accountability and traceability across the supply chain.

Exporters, manufacturers, e-commerce businesses, and logistics partners should carefully evaluate the new framework and align their inventory management, documentation, and compliance processes to ensure smooth implementation. The notification introduces a structured foundation for export-led inventory operations that supports the continued growth of India’s cross-border e-commerce sector.

Notification Reference:

DGFT
Notification No. 27/2026-27
05/08/2026

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