FEMA/RBI treatment — Amazon.ca arbitrage (US buy, Canada sell, goods never enter India)
This query is : Resolved
vinay mishra
(Querist)
29 July 2026
I'm an Indian resident planning a cross-border e-commerce model: buying products from US suppliers, shipping them directly to a Canada-based warehouse (goods never enter India), and selling to Canadian customers via Amazon.ca. This involves ongoing small-ticket transactions, not a single bulk deal.
Money flow: I pay the US supplier from India, and receive Amazon Canada sale proceeds into an Indian account.
Questions:
Does this qualify as Merchanting Trade under RBI's MTT guidelines, given it's recurring retail sales rather than a single confirmed bulk order?
Is IEC mandatory here, since goods never physically touch India?
Any GST implications, since the supply and sale both happen outside India?
Best entity structure (individual/LLP/Pvt Ltd) for this kind of recurring cross-border trade?
Would appreciate guidance or relevant circulars from anyone who has structured something similar. Thank you.
Money flow: I pay the US supplier from India, and receive Amazon Canada sale proceeds into an Indian account.
Questions:
Does this qualify as Merchanting Trade under RBI's MTT guidelines, given it's recurring retail sales rather than a single confirmed bulk order?
Is IEC mandatory here, since goods never physically touch India?
Any GST implications, since the supply and sale both happen outside India?
Best entity structure (individual/LLP/Pvt Ltd) for this kind of recurring cross-border trade?
Would appreciate guidance or relevant circulars from anyone who has structured something similar. Thank you.
03 November 2026
RBI/MTT: Eligible under RBI merchanting guidelines subject to an overall 9-month turnaround and routing through a single AD bank.
IEC: Mandatory for banking compliance and cross-border remittances.
GST: Not applicable as goods never cross Indian customs frontiers (Schedule III).
Structure: A Private Limited Company is the safest and most scalable entity choice.
IEC: Mandatory for banking compliance and cross-border remittances.
GST: Not applicable as goods never cross Indian customs frontiers (Schedule III).
Structure: A Private Limited Company is the safest and most scalable entity choice.
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