The United States continues to increase its pressure on India because the American government demands unrestricted entry to the $125 billion retail ecommerce market for Walmart and Amazon. The Financial Times reports that insiders claim the Trump administration uses trade negotiations to obtain equal business opportunities for American companies.
The upcoming U.S.-India trade agreement discussions will address ecommerce alongside agriculture and automobile and technology sectors. Ecommerce functions as a significant area of disagreement between the two parties. The United States seeks to eliminate Indian regulations which stop foreign platforms from selling directly to consumers and from giving preference to certain sellers because these policies restrict fair competition and innovation.
The Indian government has consistently supported its ecommerce regulations because these rules protect small retailers while safeguarding consumer rights. The Modi administration has implemented strict regulations which bar foreign ecommerce companies from maintaining inventory and controlling their vendor relationships. The regulatory framework was established to defend local businesses from global competitors but it has created tension with Washington.
The current timing of this pressure is strategic. The White House uses its trade influence to guarantee American companies including Amazon and Walmart maintain their position in India while the country develops stronger trade relationships with the U.S. The relaxation of India’s ecommerce rules would create new opportunities for digital innovation and employment as well as expanded cross-border trade according to lobbyists and tech executives.
The Indian government continues to exercise careful consideration about its next steps. The government officials emphasized that the market needs to stay balanced to protect the millions of small traders who operate within it. The trade negotiations will determine future U.S.-India economic relations through ecommerce access which functions as a vital point of contention.
