Schedule I explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Serial number 15 of the sectoral Table in Schedule I to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 is the trading entry. Its first two parts cover cash and carry wholesale trading and e-commerce. Both are open up to hundred per cent on the automatic route, but only for business-to-business sales and for the marketplace model; the inventory based model stays closed, except for exports under an entry added in September 2026. The Rules are made under clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999.
This article states the position as per the Rules notified on 17 October 2019 (S.O. 3732(E)) as amended by the notifications named in this article; the latest amendment consulted is S.O. 4870(E) dated 2 September 2026. Later amendments, press notes and sector regulators' conditions should be checked before acting. A foreign trading or platform group entering India can use our Indian subsidiary service.
Cash and carry wholesale trading, B2B e-commerce and the marketplace model of e-commerce: hundred per cent, automatic route. A marketplace entity shall not own the inventory; a vendor's inventory is deemed controlled by it if more than 25% of the vendor's purchases come from the marketplace entity or its group companies. Foreign investment is not permitted in the inventory based model of e-commerce, but under an entry inserted by S.O. 4870(E) dated 2 September 2026 an e-commerce entity may use that model exclusively for export of goods manufactured or produced in India. A marketplace entity with FDI must keep a statutory auditor's report by 30th September every year.
The entries after the amendments
| Serial number | Sector or activity | Sectoral cap | Entry route |
|---|---|---|---|
| 15 | Trading (heading) | - | - |
| 15.1 | Cash and Carry Wholesale Trading/ Wholesale Trading (including sourcing from MSEs) | Hundred per cent | Automatic |
| 15.1.1 | Definition (a), (b) | - | - |
| 15.1.2 | Other conditions (a) to (f) | - | - |
| 15.2 | E-Commerce (heading) | - | - |
| 15.2.1 | B2B E-commerce activities | Hundred per cent | Automatic |
| 15.2.2 | Market place model of e-commerce | Hundred per cent | Automatic |
| 15.2.3 | Other conditions (a) to (p) and Note | - | - |
| 15.2.4 | Sale of services through e-commerce | No cap cell printed | No route cell printed; the entry itself says "under automatic route" |
| 15.2.5 | Inventory-based model exclusively for export | No cap cell printed | No route cell printed |
The Table prints the cap as a percentage figure; it is written in words throughout this article.
Which notification changed what
| Provision | Change | Notification |
|---|---|---|
| 15.2.3(p) | Substituted: annual report of statutory auditor | Foreign Exchange Management (Non-debt Instruments) (Amendment) Rules, 2019, S.O. 4355(E) dated 5 December 2019, clause 6, item (v) |
| 15.2.5 | Inserted after serial number 15.2.4 | Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules, 2026, S.O. 4870(E) dated 2 September 2026 |
| 15.1, 15.1.1, 15.1.2, 15.2.1, 15.2.2, 15.2.3(a) to (o) and Note, 15.2.4 | As notified on 17 October 2019 | None of the 19 amending notifications changes them |
Serial number 15.1: wholesale trading
Definition (15.1.1). Cash and carry wholesale trading or wholesale trading (WT) means sale of goods or merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers. It implies sales for the purpose of trade, business and profession, as opposed to sales for personal consumption. The yardstick is the type of customer, not the size and volume of sales. Wholesale trading includes resale, processing and thereafter sale, bulk imports with export or ex-bonded warehouse business sales, and B2B e-commerce.
Conditions (15.1.2).
- (a) Requisite licences, registrations and permits under the relevant State and local laws shall be obtained.
- (b) Except for sales to Government, sales count as wholesale trading with valid business customers only when made to: (i) entities holding sales tax, VAT, service tax, excise duty or GST registration; or (ii) entities holding trade licences, such as a registration under the Shops and Establishment Act, reflecting that the holder is engaged in a business involving commercial activity; or (iii) entities holding permits or licences for retail trade, such as tehbazari and similar licences for hawkers; or (iv) institutions having a certificate of incorporation or registration as a society or public trust, for their self-consumption. A customer may fulfil any one of the four.
- (c) Full records of such sales (name and kind of entity, registration or licence number, amount of sale) shall be maintained on a day to day basis.
- (d) WT among companies of the same group is permitted, but such sales taken together shall not exceed 25 percent of the total turnover of the wholesale venture.
- (e) WT can be undertaken as per normal business practice, including extending credit facilities subject to applicable regulations.
- (f) A wholesale or cash and carry trader can undertake single brand retail trading subject to the conditions in serial number 15.3, with separate books of account for the two arms, duly audited by the statutory auditors; see single brand retail trading.
Serial number 15.2: e-commerce
Under serial number 15.2.1, companies would engage only in Business to Business e-commerce and not in retail trading; the entry adds that existing restrictions on FDI in domestic trading would apply to e-commerce as well. Serial number 15.2.2 opens the marketplace model.
Definitions in serial number 15.2.3
- (a) E-commerce: buying and selling of goods and services including digital products over digital and electronic network.
- (b) E-commerce entity: a company incorporated under the Companies Act 1956 or the Companies Act, 2013.
- (c) Inventory based model: an e-commerce activity where inventory of goods and services is owned by the e-commerce entity and is sold to the consumers directly.
- (d) Marketplace model: providing an information technology platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.
- (e) Digital and electronic network includes networks of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles etc.
Operating conditions in serial number 15.2.3
- (f) A marketplace entity may enter into transactions with sellers registered on its platform on a B2B basis.
- (g) It may provide support services to sellers: warehousing, logistics, order fulfilment, call centre, payment collection and other services.
- (h) It shall not exercise ownership over the inventory. Explanation: inventory of a vendor is deemed to be controlled by the marketplace entity 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.
- (i) An entity having equity participation by the marketplace entity or its group companies, or having its inventory controlled by them, shall not be permitted to sell its products on the platform run by that marketplace entity.
- (j) Goods and services offered on the website shall clearly show the name, address and other contact details of the seller. Post sales, delivery and customer satisfaction are the seller's responsibility.
- (k) Payments may be facilitated by the e-commerce entity in conformity with Reserve Bank guidelines.
- (l) Any warranty or guarantee of goods and services sold is the seller's responsibility.
- (m) Marketplace entities shall not directly or indirectly influence the sale price and shall maintain a level playing field. Services by the marketplace entity, or by entities in which it has direct or indirect equity participation or common control, shall be provided to vendors at arm's length and in a fair and non-discriminatory manner. The Explanation lists fulfilment, logistics, warehousing, advertisement or marketing, payments and financing, says cash back by group companies shall be fair and non-discriminatory, and deems it unfair and discriminatory to give one vendor terms not made available to other vendors in similar circumstances.
- (n) The wholesale trading guidelines in serial number 15.1.2 apply to B2B e-commerce activities.
- (o) No marketplace entity shall mandate any seller to sell any product exclusively on its platform.
- (p) An e-commerce marketplace entity with FDI shall obtain and maintain a report of the statutory auditor by 30th of September every year for the preceding financial year confirming compliance of the e-commerce guidelines.
Note: foreign investment is not permitted in the inventory based model of e-commerce.
Serial number 15.2.4: services
Sale of services through e-commerce shall be under the automatic route, subject to the sector specific conditions, applicable laws or regulations, security and other conditionalities.
Serial number 15.2.5: inventory-based model for exports
The entry inserted by S.O. 4870(E) dated 2 September 2026, which came into force on the date of its publication in the Official Gazette, has two clauses:
- (a) An e-commerce entity is permitted 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 provisions of the Foreign Trade Policy 2023 read with the Handbook of Procedures (HBP) and the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015.
- (b) The restrictions on Business to Consumer (B2C) and the inventory-based model of e-commerce stipulated under serial numbers 15.2.1 to 15.2.4 shall not apply to the export of goods or products through e-commerce as permitted under clause (a).
The notification names the 2015 export regulations as printed above. On the export side, see our article on the Export and Import of Goods and Services Regulations, 2026. The entry prints no separate cap or route cell, and the Note under serial number 15.2.3 stands unamended; clause (b) is what lifts the restrictions for the permitted exports.
A worked example
Mercato Global Inc holds all the shares of Bazaar Bridge India Private Limited, which runs an online platform connecting sellers and buyers. This is the marketplace model: hundred per cent, automatic route. Bazaar Bridge may offer warehousing and logistics to sellers at arm's length. One seller, Sona Traders, buys 40% of its stock from a Bazaar Bridge group company. That is more than 25%, so Sona's inventory is deemed controlled by the marketplace entity, and the business would be rendered an inventory based model, which is closed to foreign investment. Bazaar Bridge must also hold the statutory auditor's compliance report by 30th September each year.
After serial number 15.2.5 came into force, Bazaar Bridge sets up a separate line that buys handicraft products made in India, holds them as its own stock and sells them only to customers abroad. Serial number 15.2.5 permits the inventory-based model exclusively for such exports, in accordance with the instruments it names.
Need help structuring a trading or platform company?
The 25 percent tests, the bar on group sellers and the auditor's report need to be built into the operating model from the start. Our Indian subsidiary team sets up the company and reviews the model against serial numbers 15.1 and 15.2.
Key takeaways
- Wholesale trading, B2B e-commerce and marketplace e-commerce: hundred per cent, automatic route.
- Group company sales in wholesale trading cannot exceed 25 percent of the wholesale venture's turnover.
- A marketplace entity cannot own inventory; more than 25% of a vendor's purchases from it or its group companies means deemed control.
- A marketplace entity cannot let an entity in which it or its group has equity sell on its platform, nor mandate exclusivity.
- The statutory auditor's report is due by 30th September every year (S.O. 4355(E) dated 5 December 2019).
- The inventory-based model is permitted exclusively for export of goods made or produced in India (S.O. 4870(E) dated 2 September 2026).
Read next
- Serial number 15.3 of the Table: single brand retail trading
- Serial numbers 15.4 and 15.5 of the Table: multi brand retail and shops in customs bonded areas
- Serial number 5 of the Table: manufacturing and contract manufacturing
- FDI in e-commerce: a general guide
Disclaimer: Based on the Gazette text of the instrument this article names, as notified and as amended by the notifications named in the article (for the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 the latest amendment consulted is S.O. 4870(E) dated 2 September 2026), as consulted on 2 October 2026. There is no official consolidated text; the provisions were read with each amendment applied. Sectoral caps, entry routes, conditions, forms and time limits change by notification, press note and circular; later changes should be checked on the Gazette, DPIIT and Reserve Bank sites. This article is general information, not legal advice; check the official text before acting.