Foreign-owned e-commerce platforms such as Amazon and Flipkart are set to deepen their export sourcing operations from India after the government allowed them to hold inventory exclusively for exports, a move that industry executives said could significantly widen the country’s exporter base by shifting compliance and logistics responsibilities from individual sellers to the platforms.
The change allows platforms to move beyond their existing marketplace role and function as merchant exporters by procuring goods from Indian manufacturers, warehousing them and exporting them directly to overseas customers. Until now, platforms merely connected Indian sellers with foreign buyers, leaving ownership of inventory, customs documentation and export compliance with the seller.
Industry executives said the new framework could encourage thousands of smaller enterprises to enter exports by removing procedural hurdles and improving working capital cycles. Sellers are expected to benefit from faster shipment, quicker realisation of export proceeds and lower currency conversion losses as platforms assume responsibility for overseas fulfillment.
“India has a fixed set of 30,000 to 40,000 people who have been exporting, and this number has remained constant for a very long time,” Vinod Kumar, president of the India SME Forum, told Fe. “It was not possible to expect them to achieve greater export numbers than what they were already doing because they also have limited capacity. We needed to create a bigger base where more enterprises are introduced to exports, and e-commerce was the only way of doing that.”
Unlocking MSME Potential
Micro and small enterprises have traditionally depended on overseas distributors, trade fairs and multiple regulatory clearances to access foreign markets. Under the new framework, platforms can aggregate products from multiple manufacturers while handling customs procedures, certification, labelling, packaging and overseas logistics. Kumar estimated the policy could help create around 2 million exporting enterprises over the next five to six years and support e-commerce exports of nearly $100 billion.
Textiles, gems and jewellery, handicrafts, home décor and artisanal products are expected to be among the earliest beneficiaries, while electronics could also emerge as a significant export category as manufacturing expands.
Operational Hurdles
Legal experts, however, said operational clarity would be critical before the framework becomes effective. The press note does not define what constitutes goods “manufactured or produced in India”, raising questions over products assembled using imported components. Kanchan Modak, associate partner at AQUILAW, said the issue would depend on how the Foreign Trade Policy and Fema regulations determine origin.
Trader bodies, however urged safeguards to ensure export inventories are not diverted into domestic retail. Confederation of All India Traders secretary general Praveen Khandelwal called for mandatory physical audits and clear segregation of export warehouses. Industry executives said digital inventory tracking, audit trails and dedicated export warehousing could adequately address diversion concerns without diluting the benefits of the policy.