DGFT's inventory-based e-commerce export framework: what an Indian seller should test

What changed on 5 August 2026?

Notification 27/2026-27 inserts an Inventory-based Cross-border E-Commerce Facilitation Framework into FTP 2023. Public Notice 25/2026-27 adds the operating procedures and ANF-9A registration form. Together they allow eligible export-only inventory operations through an Exporter-on-Record registered under the framework.

The framework is deliberately narrower than ordinary inventory commerce. It is built around confirmed export orders, Indian-origin goods, segregated inventory, seller protections, traceability and an explicit prohibition on diverting export inventory or returned goods into India's domestic market.

Evidence: Directorate General of Foreign Trade · Directorate General of Foreign Trade

Freeze the EOR, seller and order before discussing fulfilment

The notified EOR is an entity with a valid IEC and GSTIN, registered by DGFT under this framework, that exports and sells goods procured from one or more Sellers-on-Record to overseas buyers. The Seller-on-Record is GST-registered in India and supplies goods produced in India against the EOR's confirmed export orders.

A brand should not treat EOR as a loose marketing label. Ask for the legal entity, registration evidence, IEC, GSTIN, platform relationship, warehouse locations and contract. Match those facts to the exact overseas order and product before discussing FBA, a foreign 3PL or a marketplace listing.

• Named EOR legal entity and DGFT registration
• Named Seller-on-Record and manufacturing or brand ownership
• Confirmed overseas buyer order
• Exact Indian-origin product and destination
• Written acceptance, payment and return terms

Evidence: Directorate General of Foreign Trade · Directorate General of Foreign Trade

Confirmed orders come before transfer of title

The notification says title may pass from the seller to the EOR only against a confirmed export order from a buyer outside India. Speculative title transfer or inventory build-up without that order is not permitted. Export inventory must be distinctly identified, segregated and traceable through a digital repository linked to procurement, GST invoices and export documents.

This changes how a proposal should be modelled. A pitch that begins with buying a large speculative batch and placing it in a warehouse is not supported by this framework merely because the eventual customer is overseas. The order, title event, inventory record and export documents must form one traceable chain.

Evidence: Directorate General of Foreign Trade · Directorate General of Foreign Trade

The seller payment promise is not the buyer payment cycle

The EOR must pay the Seller-on-Record no later than seven days after acceptance or deemed acceptance of the goods. Payment cannot be delayed because the overseas buyer has not paid or later returns the goods. That rule moves working-capital and return exposure toward the EOR.

Where the EOR claims eligible export rebates and refunds, the framework requires apportionment among sellers based on attributable FOB value. The procedure caps the EOR's administrative charge at 10 percent of the gross amount and requires seller-attributable export benefits to be disbursed within 30 days after the EOR receives them.

Evidence: Directorate General of Foreign Trade · Directorate General of Foreign Trade

Destination compliance sits with the EOR, but specialists still matter

The procedure makes the EOR responsible for ensuring that export inventory complies with destination-country requirements before export, including relevant testing, inspection, certification, registration, licensing, labelling, packaging, product information and safety warnings.

That responsibility does not make one company an expert in every product and market. A credible operating model names the laboratory, certification body, customs broker, tax adviser, product counsel, platform or warehouse that will confirm each part. The EOR needs the decision record and evidence, not unsupported assurances.

Evidence: Directorate General of Foreign Trade

Returns are an operating design, not a footnote

The EOR owns reverse logistics costs. Returned or rejected export consignments cannot be sold in India's domestic market by the EOR. The procedure requires those goods to be re-exported, returned to the seller or disposed of by destruction or another agreed method within 30 days of receipt in India.

The seller agreement should therefore define cancellation, rejection, repair, re-export, destruction, evidence and cost allocation before the first order. A high-return product can make the model unattractive even when customer demand looks strong.

Evidence: Directorate General of Foreign Trade · Directorate General of Foreign Trade

The framework requires visibility, certification and five-year records

Seller-accessible records must include the final overseas sale price, order status, shipment tracking and destination country for the seller's goods. Product listings or other applicable means must also disclose the manufacturer or brand owner and, where different, the Seller-on-Record.

The EOR must obtain an independent compliance certificate and furnish it to DGFT within 90 days after the financial year ends. The procedure also requires relevant records to be preserved for five years from the end of the financial year in which the inventory is finally exported, returned, rejected, destroyed or otherwise disposed of.

Evidence: Directorate General of Foreign Trade

What an Indian seller should ask before signing

Ask the prospective EOR for the registered entity, supported countries and platforms, product acceptance method, seven-day payment trigger, export-benefit calculation, seller dashboard, destination-compliance workflow, return disposition, insurance and dispute process. Then test the unit economics with the contract rather than a sales presentation.

Sartha can screen the transaction structure and assemble the open questions. Registration, legal interpretation, customs treatment, product compliance, tax and platform acceptance still belong to the responsible authorities and qualified providers.

• Is there a confirmed overseas order before title moves?
• Who funds payment before the overseas buyer settles?
• Which party bears rejection, return and destruction costs?
• How will the seller see final price and shipment status?
• Who confirms the product's destination-country requirements?
• Does the product retain margin after every operating obligation?