At the current juncture, the ecommerce model allows the global companies to run their ecommerce business based on a market place model and not based on an inventory-based model. That means; if an Amazon or Flipkart wants to run ecommerce business in India and get FDI, it has to necessarily be based on the market place model only. Now that is set to change. The government could allow these ecommerce companies to run on inventory model for exports only. 

This is likely to meet the long-standing demand of global ecommerce players, who have been demanding an inventory model for a long time to give them more flexibility in handling ecommerce orders. Global players have protested that this gives an unfair advantage to the local ecommerce players who are allowed to run their ecommerce business based on the inventory model. Several global ecommerce players want to give a big boost to their exports but are not able to do so due to restrictions. Now, they can hold inventory  for exports, and also attract FDI into such businesses where the inventory is meant for exports only. 

The dichotomy is most visible when we look at comparison of India and China. India had already set an export target of touching $1 trillion by the year 2030 and that target has only become more tough with the recent restrictions imposed by the US tariffs. India ecommerce exports are worth $2 billion, which is paltry compared to $350 billion of ecommerce exports that China boasts of. Now, India is targeting a multi-fold increase in the ecommerce exports by 2030; allowing FDI in ecommerce for exports, and also permitting an inventory model. The idea is to bridge the gap with China and also make up for the lost exports to the US. 

However, such a massive shift will be easier said than done. Indian annual exports are still under $500 billion, so we are still talking of a long growth path from here. Secondly, infrastructure is a major issue. While a lot of money has been invested in infrastructure, India has a long way to traverse before it can get infrastructure of Chinese levels and the all-round-connectivity that China gives to exports. But, above all, India will need a very solid and concerted sort of export strategy to meet the targets. For now, Indian ecommerce exports are low-end goods made by MSMEs, while China exports everything under the sun. Global trade will need a strong reason to shift from China to India in this case.