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If you run a direct-to-consumer brand that makes its products in India and wants to sell them to customers abroad, foreign capital used to come with one hard limit: a company with foreign investment could run a marketplace, but it could not own inventory and sell it to consumers itself. That limit now has an export exception. A new entry 15.2.5 in Schedule I of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (NDI Rules), inserted by the Fourth Amendment Rules, 2026 (S.O. 4870(E) dated 2 September 2026), lets an e-commerce entity run an inventory-based model exclusively for the export of goods or products manufactured or produced in India.

For a founder, the question is no longer “can we take FDI and hold stock?” It is “which sales sit inside the permission, and which stay outside it?”

What entry 15.2.5 actually says

Clause (a) permits an e-commerce entity to engage in the inventory-based model of e-commerce exclusively for the export of goods or products manufactured or produced in India, in accordance with the Foreign Trade Policy 2023 read with the Handbook of Procedures and the FEMA export regulations. Clause (b) says the B2C and inventory-model restrictions in entries 15.2.1 to 15.2.4 do not apply to exports permitted under clause (a). The entry gives legal effect to DPIIT Press Note No. 3 (2026 Series), which itself says the decision takes effect from the date of the FEMA notification.

The note in entry 15.2.3 is still in the text: “Foreign investment is not permitted in inventory based model of e-commerce.” Entry 15.2.5 carves out exports from that note. It does not remove it.

Four tests your business has to pass

Entry 15.2.5 does not state a separate sectoral cap or entry route of its own; it sits inside the e-commerce entry. Before a foreign investor subscribes, map the proposed structure against the full text of entry 15.2, not just the new clause.

The line that has not moved: domestic sales

The words “exclusively for the export” do the real work. A company with foreign investment that owns inventory and sells it to consumers in India is still outside what entry 15.2 permits. If your plan is to sell the same products at home and abroad, the group structure has to keep domestic inventory sales out of the foreign-funded inventory entity. Design that before the term sheet, not after the first audit.

The marketplace rules still matter too. Under entry 15.2.3, a vendor’s inventory is deemed controlled by a marketplace if more than 25% of the vendor’s purchases are from the marketplace entity or its group companies, which renders the business an inventory based model.

Every shipment now runs on the 2026 export rules

Entry 15.2.5 names the FEM (Export of Goods & Services) Regulations, 2015. RBI’s Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 supersede them and came into force on 1 October 2026. For an inventory-model exporter, that means:

• Declaration (regulation 3(1)): the EDF, with the full export value, is furnished at the time of export; at an EDI port it is deemed submitted as part of the shipping bill.
• Realisation (regulation 5(1)): nine months from the date of shipment; for goods sent to a warehouse outside India, nine months from the date of sale from the warehouse; twelve months where the export is invoiced or settled in Indian Rupees. Your AD bank may extend the period on a request citing reasons.
• Small shipping bills (regulation 4(2)): up to Rs 10 lakh, the EDPMS entry can be closed on your declaration that payment has been realised in full or otherwise, or by a quarterly declaration for bulk closure.
• Reduction and third-party receipts (regulations 6 and 8): both sit with your AD bank.

We explain the new realisation clock in more detail in our note on the FEMA export rules from 1 October 2026.

Reporting the money coming in

The new entry changes what the company may do, not how the investment is reported. Equity instruments issued to a person resident outside India are reported in Form FC-GPR not later than thirty days from the date of issue, under RBI’s Master Direction on Reporting under FEMA. See our guide to the FC-GPR and FC-TRS clock.

Your checklist

1. Test the model against all four parts of entry 15.2.5.
2. Keep domestic sales outside the foreign-funded inventory entity.
3. Track EDPMS under the 2026 Regulations: date of shipment for direct consumer shipments, date of sale for stock held in an overseas warehouse.
4. Agree the Rs 10 lakh declaration route with your AD bank, per shipping bill or quarterly.
5. File Form FC-GPR within thirty days of issuing shares to the foreign investor.

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Source: Ministry of Finance (Department of Economic Affairs), Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2026, S.O. 4870(E) dated 2 September 2026, Schedule I entry 15.2.5, rbi.org.in
Source: Department for Promotion of Industry and Internal Trade, Press Note No. 3 (2026 Series), Review of Foreign Direct Investment (FDI) policy on E-commerce Sector, dpiit.gov.in
Source: Reserve Bank of India, Notification No. FEMA 23(R)/2026-RB, Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, rbi.org.in
Source: Reserve Bank of India, Master Direction: Reporting under Foreign Exchange Management Act, 1999, FED Master Direction No. 18/2015-16, rbi.org.in

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A S Banka Advisors Private Limited. This article is for general information and is not legal advice.