New Delhi, 05 August (H.S.): The central government has notified rules for inventory-based cross-border e-commerce exports for online companies. Under the Foreign Trade Policy (FTP) 2023, the government has notified an inventory-based cross-border e-commerce export framework.

Under the new regulations, Indian sellers will supply domestically manufactured goods to Exporter-on-Record (EOR) entities only against confirmed export orders. The responsibility of ensuring and declaring the country of origin of the goods will rest with the sellers.

According to the Ministry of Commerce and Industry, the framework provides a comprehensive policy and procedural structure to facilitate inventory-based cross-border e-commerce exports of goods manufactured or produced in India.

As per the notification, companies will now be allowed to procure goods only against confirmed export orders, and advance stocking of inventory based on demand forecasts will not be permitted for exports. The government had allowed foreign direct investment (FDI)-backed e-commerce companies to maintain inventory exclusively for export purposes on July 23. Under this arrangement, only goods manufactured or produced in India will be eligible for export.

The ministry said that following amendments to the foreign direct investment policy, the central government has now implemented the related regulatory framework under the Foreign Trade Policy. The framework enables such exports while protecting the interests of Indian sellers.

For implementing the decision, the Directorate General of Foreign Trade (DGFT) has issued a notification stating that foreign-invested e-commerce companies will have to register with the government as an “Exporter-on-Record” (EOR) for the purpose of storing goods exclusively for exports through online platforms.

According to the notification, eligible e-commerce companies will be able to undertake inventory-based operations exclusively for exports through registered EOR entities. The EOR will be permitted to purchase India-manufactured goods from Indian “Seller-on-Record” (SOR) entities based on confirmed overseas orders.

The ministry stated that through registered EOR entities, Indian sellers will gain access to international markets, while responsibilities such as export documentation, customs formalities, compliance with regulations of destination countries, product testing and certification, packaging, labelling, supply chain management, logistics and reverse logistics will be handled by the EOR.

As per the notification, an EOR will be an entity possessing a valid Importer Exporter Code (IEC) and Goods and Services Tax Identification Number (GSTIN), and registered with the DGFT under this framework. It will be allowed to procure goods from one or more Indian sellers for export purposes.

The notification further stated that a separate legal entity will have to be established for such operations. At the time of registration or modification as an EOR, the concerned entity will be required to provide details of its shareholding structure and information regarding ownership or control links with the e-commerce company.

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Hindusthan Samachar / Jun Sarkar