The United States government has expressed concern about India’s revised e-commerce regulations, pointing out to officials in New Delhi that the policy will hinder the Indian investment plans of Amazon and Walmart.
These new e-commerce investment rules kick in on Feb. 1, and they ban companies from selling products via firms in which they have an equity interest. The new rules also bar them from making deals with sellers to sell exclusively on their platforms. The policies may be targeting Walmart, which just last year invested $16 billion in buying 77 percent of India’s Flipkart. Amazon would also have to change their business structures within India if it cannot strike exclusive deals with sellers, which will raise its operational costs.
It is doubtful that US complaints will win the two US retailers any relief. The regulations will limit their ability to operate extensively in India, protecting existing Indian retailers from the increased competition. With an election due in May, the ruling party is not inclined to favor non-Indian retailers over Indian retailers.