Inventory-Based Cross-Border E-Commerce Export Framework
DGFT Introduces Inventory-Based Cross-Border E-Commerce Export Framework – Notification No. 27/2026-27
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, has introduced a new Inventory-based Cross-Border E-Commerce Facilitation Framework under the Foreign Trade Policy (FTP) 2023.
The framework has been introduced through Notification No. 27/2026-27 dated 5 August 2026 and is effective immediately.
Key Features of the New Framework
1. Exporter-on-Record (EOR)
An Exporter-on-Record (EOR) is an entity having a valid IEC and GSTIN and registered with DGFT under this framework.
The EOR will procure goods from one or more Indian sellers against confirmed export orders and undertake the export and sale of those goods to customers located outside India.
Where an e-commerce entity is required to conduct export activities through a separate legal entity under the applicable FDI policy, the EOR must disclose its ownership/shareholding and its relationship with the e-commerce entity at the time of registration or amendment.
2. Seller-on-Record (SOR)
A Seller-on-Record (SOR) is an entity registered under the applicable GST law in India that supplies domestically produced goods to the EOR against confirmed export orders.
The goods supplied by the SOR are intended exclusively for export.
3. Export Inventory
Export inventory refers to goods purchased by the EOR from an SOR against a confirmed order from an overseas buyer.
Such goods must be specifically identified, recorded and traceable as stock intended for export.
Goods held by an SOR for sale in the domestic market will continue to be treated as Domestic Inventory.
4. Only Indian-Origin Goods Eligible
Only goods having Indian origin can be covered under this framework.
The SOR will be responsible for ensuring and declaring the correct origin of the goods in accordance with applicable laws and origin requirements.
DGFT may also specify certain goods that will not be eligible under the framework.
5. No Speculative Inventory Transfer
Ownership of goods can move from the SOR to the EOR only after the EOR receives a confirmed export order from an overseas buyer.
Accordingly, speculative transfer of goods or accumulation of export inventory without a confirmed export order is not permitted.
Inventory Segregation and Digital Records
The EOR will be responsible for:
- Clearly identifying export inventory;
- Keeping export inventory separate from other stock;
- Maintaining appropriate records of such inventory;
- Tracking procurement from each SOR;
- Maintaining inventory status; and
- Linking inventory with the relevant export documentation.
The detailed method and standards for maintaining these records will be prescribed through the Handbook of Procedures.
Payment to Sellers
The EOR must pay the SOR promptly after accepting the goods.
In any case, payment must be made within 7 days from acceptance or deemed acceptance of the goods.
Importantly, payment to the SOR cannot be postponed because:
- Payment from the overseas customer has not yet been received;
- The overseas customer subsequently returns the goods; or
- Any other event beyond the control of the SOR occurs.
Export Incentives, Rebates and Refunds
The EOR will be entitled to claim applicable export incentives, rebates, refunds or remissions, including benefits such as:
- Duty Drawback;
- RoDTEP;
- RoSCTL; and
- Other notified export-related monetary or transferable benefits.
The EOR must distribute the seller-attributable portion of such benefits among the SORs whose goods form part of the export consignment.
The distribution will be based on the FOB value attributable to each seller’s goods, as declared in the relevant Shipping Bill.
The EOR may deduct an administrative charge from the export benefits. The remaining amount attributable to the sellers must be passed on to the respective SORs.
This pass-through obligation will arise when the EOR has actually claimed the applicable export rebate or refund for that consignment.
GST Refunds
Refund of taxes received by the EOR under the Central GST law will belong to the EOR and will not be treated as an export benefit attributable to the SOR.
This is separate from the obligation relating to export incentives such as RoDTEP, RoSCTL and Duty Drawback.
Returned and Rejected Export Consignments
The EOR will be responsible for handling the reverse logistics of goods returned or rejected by overseas customers.
Returned or rejected goods cannot be sold or supplied in the domestic market by the EOR, either directly or through another person or entity.
The reverse-logistics costs will be borne by the EOR.
E-Commerce Export Hubs
The EOR is expected to use notified E-Commerce Export Hub (ECEH) infrastructure, wherever practicable.
Such utilisation will depend upon the operational readiness and available capacity of the notified facilities.
Objective of the Framework
The new framework aims to facilitate an inventory-based model for cross-border e-commerce exports.
Under this model, the EOR can hold export-designated inventory, carry out export-related activities and facilitate Indian sellers in reaching international customers, while maintaining specific safeguards regarding confirmed orders, inventory segregation, payments and export benefits.
Effective Date
The framework has been introduced with immediate effect from 5 August 2026.
Detailed procedures and standards relating to inventory identification, segregation, record keeping and the digital repository are expected to be prescribed through the Handbook of Procedures.
In Brief
The new framework creates a structured mechanism for export-only inventory through an Exporter-on-Record, while allowing Indian sellers to supply goods against confirmed overseas orders.
The key safeguards include no speculative inventory transfers, payment to sellers within 7 days, traceable export inventory, seller-wise sharing of claimed export incentives and restrictions on domestic sale of returned consignments.
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