Govt Operationalises New Framework To Spur Ecommerce Exports

On August 5, the Directorate General of Foreign Trade (DGFT) unveiled a new operating framework to empower "inventory-based cross-border ecommerce" in India. This move, effective immediately, can be found under the Foreign Trade Policy, 2023 and necessitates registration for marketplaces seeking to export products.

The framework mandates registration, inventory handling, seller visibility, reverse logistics, compliance checks and dispute resolution for B2B ecommerce exports. Crucially, it prohibits stockpiling and allows procurement of goods solely against confirmed export orders. All export inventory must be distinctly identified, segregated and maintained digitally for traceability. The inventory cannot be diverted for domestic sale.

An "exporter-on-record" is introduced, responsible for managing export inventory, ensuring compliance and handling the export process. This entity, or inventory-based cross-border marketplace, must register with DGFT. The "seller-on-record" must also maintain a digital repository of procurement records, GST invoices and export documents, accessible to DGFT and authorised authorities.

The onus is on the exporter-on-record to confirm that goods in their inventory match the seller's declared inventory, comply with all destination country laws, and adhere to market access requirements. In case of quality issues, goods must be returned to the seller within seven days, or re-exported, returned, destroyed or disposed of within 30 days.

The framework also includes a dispute resolution mechanism, with contentious issues between exporters and sellers to be resolved within 30 days by the relevant DGFT regional authority, or by DGFT headquarters if necessary. The framework ensures timely payments to Indian sellers, and apportions export rebates and refunds to "Sellers-on-Record" proportionally to the FOB value of their goods.

Online marketplaces exporting under this regime will need to obtain an annual compliance certificate from an independent professional within 90 days of the fiscal year's end. Currently, marketplaces can only connect buyers and sellers for a fee, but this restriction remains for local goods, removed for exports. The move aims to enable $200-$300 billion in ecommerce exports from India by 2030.