Quick Commerce FDI Rules Explained: Marketplace Model vs Inventory Model and What Brands Should Do

India's FDI policy lets a foreign-invested e-commerce company run a marketplace, but not own the stock it sells. That is why quick commerce firms with foreign shareholders had to work through third-party sellers. Eternal, which owns Blinkit, proposed in April 2025 to cap foreign ownership at 49.5% so it counts as an Indian-owned and controlled company. Blinkit's inventory-led model then took effect on 1 September 2025. This page explains the rules and what changes for you as a brand, as of November 2026.

What is the difference between the marketplace and inventory model?

In the marketplace model, the e-commerce entity only provides an information technology platform on a digital network that connects buyers and sellers. In the inventory model, the e-commerce entity owns the inventory of goods.

The practical difference for a brand:

The FDI rows come from the same Bar and Bench commentary. The other rows describe how the two models generally work and are not a legal definition.

What does the 25% rule in Press Note 2 of 2018 say?

Press Note 2 of 2018 clarified when a marketplace is treated as controlling a vendor's inventory. Control is presumed when more than 25% of the vendor's purchases are from the marketplace entity or its group companies. That makes the business an inventory-based model, and the FDI restrictions follow.

This is the reason large marketplaces have been scrutinised over "preferred" or group-linked sellers. One report notes that Flipkart faced a 2021 Enforcement Directorate show-cause notice proposing a ₹10,000 crore fine. That figure was a proposed penalty in a notice, not a final finding.

How did Blinkit move to an inventory model?

The route was ownership, not a change in the rule. As described in the Outlook Business report, an "Indian-owned and controlled company" (IOCC) needs more than 50% of equity held by Indian entities or citizens, plus Indian control over the appointment of directors and key management and policy decisions. Eternal's board proposed capping foreign ownership at 49.5%, subject to shareholder approval, and the report says Indian investors already held 55% of Eternal on 31 March 2025.

Timeline reported by Medianama:

1. 30 July 2025: sellers had to opt in. Those who did not would have listings removed and unsold stock returned, after reverse-logistics costs.
2. 31 August 2025: inventory moved from sellers' books to Blinkit's entity.
3. 1 September 2025: the inventory-led model took effect.

Blink Commerce Private Limited (BCPL) became the merchant of record. Eternal's own page confirms Blinkit is part of Eternal Ltd. and lists 2,700+ stores across 400+ cities. It does not state which model Blinkit runs.

What changes for a brand selling to Blinkit?

According to the Medianama report:

• Sellers no longer need separate GST additional places of business in each state, or their own FSSAI licences, which lowers compliance work.
• Blinkit accepts stock only through formal purchase orders.
• You still manage listings and pricing, but Blinkit sees SKU-level dashboards for dark stores. Underperforming products may be recalled, and expansion to more locations depends on Blinkit's approval.
• Blinkit says commissions and payout cycles are unchanged.

For example, a snack brand that earlier sent stock to several state-level dark stores under its own GST registrations would now raise one invoice against a Blinkit purchase order. The tax and licensing treatment of that invoice is for your chartered accountant to confirm. Our Blinkit seller fees guide and the planned Blinkit inventory model explainer cover the commercial side.

What risks come with an inventory model?

The same report says that as merchant of record, Blinkit may lose Section 79 IT Act safe harbour protection and become directly liable for product defects, consumer complaints, tax and FSSAI licensing. That is the report's reading, not a court finding.

For you, the likely effects are tighter quality checks and more careful purchase-order terms. I have not seen Blinkit's purchase-order terms, so I cannot say what warranty or return clauses apply. Read them before you sign.

Do Zepto, Instamart and Flipkart Minutes work the same way?

Not confirmed. None of the sources I opened states the foreign-ownership position or current model for Zepto, Swiggy Instamart or Flipkart Minutes, so do not assume the Blinkit rules carry over. Compare the platforms in our Blinkit vs Zepto vs Instamart guide. An Inc42 feature describes Zepto as running a full inventory model, buying from wholesalers, but I treat that as a report, not a filing.

What the platforms themselves publish is about scale, not legal structure. Flipkart says Minutes has nearly 1,200 micro fulfilment centres, a presence in more than 150 cities and close to 500 D2C brands in its partner ecosystem. Amazon says Amazon Now runs through close to 800 micro-fulfilment and urban fulfilment centres in more than 120 cities. Neither page says whether stock is owned by the platform or by sellers. Zepto's brand portal says it gives brands analytics, product availability information, search share data and advertising options, and again says nothing on the model.

So the honest answer is that the legal model can differ by platform, by category and over time. The way to find out is your own contract: who invoices the customer, and who you invoice.

One more 2026 change is separate: a Press Note allows foreign-invested firms to hold inventory solely to export goods made in India. It does not cover domestic quick commerce. Read FDI in inventory e-commerce for exports.

What should a brand do now?

1. Ask each platform's category manager in writing whether you are supplying under a marketplace or purchase-order arrangement.
2. Check invoicing: who is the buyer, which GST registration you bill, and who holds FSSAI or other licences.
3. Read recall, return and wastage terms in the purchase order.
4. Track whether the platform's own private labels compete with you (see private labels on quick commerce).
5. Keep a record of the dates and terms you agreed to, in case rules change again.

FAQ

Can foreign-funded quick commerce companies own inventory in India? Not under the FDI policy as reported: FDI is not permitted in the inventory model, so a company with foreign investment that is not an Indian-owned and controlled company must run a marketplace. Eternal's route was to cap foreign ownership at 49.5%.

What is an Indian-owned and controlled company? As described in a news report, it needs over 50% equity held by Indian entities or citizens, with Indian control over director appointments and key management and policy decisions. The status is governed by the FDI Policy, FEMA 1999 and DPIIT press notes.

What is the 25% rule? Press Note 2 of 2018 presumes a marketplace controls a vendor's inventory when more than 25% of the vendor's purchases are from the marketplace or its group companies. That turns the arrangement into an inventory model for FDI purposes.

Did Blinkit stop being a marketplace? Blinkit moved to an inventory-led model from 1 September 2025, with BCPL as merchant of record. Medianama noted some listings from other sellers still appeared and that Blinkit had not formally announced which categories had fully moved.

Do I still need GST registration in every state? The Medianama report says sellers no longer need separate additional places of business per state under the new model. Confirm your own position with a GST practitioner, because it depends on how you supply.

Does this affect my commission? Blinkit says commissions and payout cycles are unchanged, per Medianama. Platform terms can change, so confirm in your agreement.

Next step for your brand

If you supply Blinkit, Zepto or Instamart and want a second pair of eyes on listings, ads and onboarding terms, talk to Blooprint about quick commerce management.