India has introduced a significant foreign direct investment (FDI) reform aimed at boosting exports by allowing inventory-based e-commerce exports of ‘Made in India’ products. The policy is expected to benefit nearly 1.8 crore manufacturing micro, small and medium enterprises (MSMEs) by making it easier for them to reach international markets through specialised e-commerce platforms.
The reform has been welcomed by Empower India, which, in consultation with industry experts, said the move could help accelerate India’s long-term goal of becoming a USD 2 trillion export economy under the Viksit Bharat vision.
According to experts, one of the biggest challenges faced by manufacturing MSMEs has been limited access to export infrastructure rather than a lack of production capability. While many businesses produce globally competitive goods, they often struggle with international logistics, warehousing, payments and distribution, making it difficult to expand overseas.
The new policy seeks to address these challenges by allowing FDI-backed inventory-based e-commerce platforms to manage cross-border logistics, storage and market access for export purposes. This is expected to reduce the burden on smaller manufacturers, enabling them to focus on production while using specialised platforms to reach global buyers.
Experts believe the reform could particularly benefit manufacturing clusters across states such as Uttar Pradesh, Tamil Nadu, Gujarat and Rajasthan, where MSMEs produce products including textiles, engineering goods, handicrafts, jewellery, fragrances and spices.
K. Giri, Director General of Empower India, said the reform sends a strong message that India is ready to expand manufacturing at scale. He noted that the policy provides global brands investing in India with a direct pathway to international markets through export-focused e-commerce platforms. According to him, the country’s manufacturing MSMEs have long possessed the capability to compete globally, but limited infrastructure has prevented them from scaling exports.
Spencer Cohen, Principal and Founder of High Peak Strategy LLC, compared the reform with China’s experience, where e-commerce platforms have played an important role in connecting manufacturers with consumers around the world. He said India now has an opportunity to build a similar ecosystem that helps small and medium-sized manufacturers overcome the costs and complexities of entering foreign markets.
The policy has also received support from industry bodies representing MSMEs. Vinod Kumar, President of the India SME Forum, said the reform has generated enthusiasm among its members. He added that most MSMEs face greater challenges in accessing export markets than in manufacturing quality products. By allowing businesses to leverage integrated export infrastructure, the policy could encourage more enterprises to become exporters and strengthen India’s position in global value chains.
Prof. Viswanath Pingali of IIM Ahmedabad said India’s manufacturing sector already produces globally sought-after products, but access to international markets has remained a major bottleneck. He added that digital platforms, combined with the new FDI framework, could significantly expand India’s exporter base if supported by clear implementation guidelines.
Legal experts have also welcomed the move. Shreya Suri, Partner at IndusLaw, said the policy carefully balances export promotion while retaining the existing domestic FDI framework for e-commerce. She stressed that regulatory clarity and compliance standards will be important for ensuring confidence among manufacturers, investors and digital platforms.
Empower India believes the reform will become increasingly important as India signs new free trade agreements and strengthens its presence in global markets. By enabling more manufacturing MSMEs to participate in exports through digital platforms, the policy has the potential to connect Indian businesses with consumers across the world and contribute to the country’s long-term export ambitions.
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