Inventory represents a soldier's personal available storage space. The inventory space consists of holsters, from which weapons and certain items can be quickly retrieved, and general backpack space, where other items of interest may be kept.
Each type of armor has a different size of inventory. Infiltration Suits have the smallest and MAXes have the largest. Each inventory type displays a holster and backpack space. Items placed in the holsters appear on your avatar.
To open your Inventory, press the "I" key or approach an Equipment terminal, locker, or vehicle trunk and press the "G" key. This will open up your Inventory window and allow you to customize your loadout.
You may double click or click and drag to place an item in your inventory. Right-clicking will swap an item between holster slots depending on their size.
When you die, your backpack will remain where you fell, along with whatever items were in your inventory at the time. Backpacks will deconstruct more rapidly in areas with a larger number of people or activity going on.