The recent relaxation of e-commerce regulations in India coincides with ongoing challenges faced by both India and the United States in finalizing a comprehensive trade agreement.
For years, the investment rules governing e-commerce have been a contentious issue between New Delhi and Washington, particularly affecting major players like Amazon and Walmart.
This policy alteration marks a significant shift in India’s historically stringent e-commerce framework, which has traditionally prohibited foreign online retailers from directly engaging in the sale and purchase of goods.
Amazon and Walmart contend that these restrictions hinder their expansion efforts, while domestic retailer associations caution that any liberalization could bestow an undue advantage upon foreign enterprises.
In an effort to safeguard millions of small retailers, India has previously permitted foreign e-commerce entities to function solely as online marketplaces serving as intermediaries between buyers and sellers.
The government asserts that this recent change aims to enhance export capabilities.
The statement elaborated that the decision would “facilitate greater exports through easier and enhanced access to global markets.”
In a response to this development, Amazon indicated to Reuters that the amended policy would empower manufacturers in smaller towns and cities to access international buyers while supporting its aspiration of achieving $80 billion in cumulative exports from India by 2030.
Walmart’s Indian e-commerce affiliate, Flipkart, did not provide a response to Reuters inquiries regarding the matter.
Call for Stringent Oversight
This liberalization occurs despite endorsements from industry groups representing small retailers, which expressed opposition to loosening restrictions for U.S. companies in private discussions with the government last year.
The Confederation of All India Traders (CAIT), a representative body for millions of brick-and-mortar retailers, has cautioned that the policy change could enable foreign firms to manipulate and dominate supply chains.
An investigation conducted by India’s antitrust authority in 2024 revealed findings that Amazon and Flipkart had violated competition laws by privileging select sellers on their platforms—allegations that both companies categorically deny.
“A robust monitoring mechanism must be established to preclude any potential exploitation of this provision. Given the historical conduct of large tech corporations, strict oversight is imperative,” stated Praveen Khandelwal, Secretary-General of CAIT, in an interview with Reuters.
Amazon and Flipkart command a substantial share of India’s burgeoning e-commerce sector, projected to reach $250 billion by 2030, as per a Google and Deloitte report released in April, an impressive surge from the current valuation of approximately $90 billion.
Source link: News.tuoitre.vn.
