India will let foreign-funded e-commerce companies own the goods they sell for the first time, as long as every item is exported, under a framework notified on August 5. Foreign investment in inventory-based e-commerce has been banned since Press Note 2 took effect in February 2019, which is why Amazon and Flipkart run as marketplaces in India rather than retailers. Amazon unwound Cloudtail in 2022 and cut ties with Appario in 2023 after regulators went after the preferred-seller arrangements that let it sell its own goods indirectly, and the Enforcement Directorate is still probing whether either platform controlled its vendors. The export arm has to be separately incorporated and disclose its ownership ties to the platform, and it can buy only against confirmed foreign orders.
