Commerce Ministry Exempts Exports From FDI Restrictions

After years of industry lobbying, the commerce ministry has now relaxed foreign direct investment (FDI) rules to enable online marketplaces to export products from India. 

In a press circular dated July 23, the commerce ministry noted that FDI is now permitted in B2B ecommerce and marketplaces models. It also clarified that foreign direct investments are still now allowed for B2C and inventory-based ecommerce platforms. 

With this, all decks have now been cleared for players like Amazon and Walmart-owned Flipkart to buy products directly from Indian sellers and then sell them to customers overseas.

“In order to facilitate greater exports through easier and increased access of global markets by Indian sellers, the extant FDI Policy has been reviewed and it is decided that the restrictions on inventory-based model of e-commerce shall not apply in case of exports of domestically manufactured and/or produced goods/product,” read the press circular. 

The norms come into effect immediately. Under current rules, the Indian government bars ecommerce platforms from stocking and selling goods directly to consumers. Instead, it only allows marketplaces to connect buyers and sellers for a fee. While these restrictions continue for local stock, the mandate has been removed for exports.

For years, Amazon and Walmart were at odds with the Centre over the restriction. However, officials began reviewing the demand in August last year after the commerce ministry held discussions with industry stakeholders to explore pilot projects to enable marketplaces to source products from Indian sellers for resale overseas.

During the meeting, ecommerce major Amazon reportedly lobbied heavily to exempt exports from FDI restrictions. However, several retail bodies pushed against the move, citing alleged deep-discounting tactics and favourable policies (for large sellers) employed by Amazon and Flipkart.

Thereafter in November 2025, the commerce ministry reportedly circulated a note on allowing FDI in inventory-based ecommerce models, solely for exports, to boost exports from the country without denting small retailers and businesses. It then also sought views and comments on the note from stakeholders.

With all decks cleared, the two ecommerce giants would be looking to scale exports out of India. Last year, Amazon said that its cumulative exports from India between 2015 and 2025 crossed the $20 Bn mark. The company has set a target of exporting goods worth $80 Bn from India by 2030.

This also fits neatly into Centre’s bid to enable $200-$300 Bn in ecommerce exports from India by 2030.

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