India Plans to Ease E-Commerce Rules to Boost Exports

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India is considering a major policy shift that could allow global e-commerce giants such as Amazon to buy products directly from Indian sellers and sell them overseas, according to a government draft proposal seen by Reuters.

Currently, India prohibits foreign e-commerce companies from selling goods directly to consumers either domestically or abroad, restricting them to operate only as intermediaries connecting buyers and sellers. The proposed policy, drafted by the Directorate General of Foreign Trade (DGFT), aims to simplify exports and support small Indian businesses struggling with complex compliance and documentation processes.

Under the new model, a “third-party export facilitation” system would be introduced, where a dedicated export entity linked to e-commerce platforms would handle regulatory requirements. The DGFT has suggested implementing the plan on a pilot basis before expanding it nationwide.

The proposal, which still requires cabinet approval, comes as India and the United States work to narrow trade differences and finalize a long-awaited trade agreement. Amazon, which has been lobbying for relaxed rules, said the move could empower Indian exporters. The company has already helped generate $13 billion in exports from India since 2015 and aims to raise that figure to $80 billion by 2030.

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However, India’s powerful retail lobby, the Confederation of All India Traders (CAIT), has voiced strong opposition, warning that such a move could allow foreign companies to dominate supply chains and potentially divert goods meant for export back into the domestic market.

CAIT President B.C. Bhartia called the plan “a slippery slope,” raising concerns about monitoring and enforcement. The DGFT’s draft proposal includes strict penalties and possible criminal action for any policy violations. If approved, the reform could mark a significant step toward making India a global e-commerce export hub.