A U.S. lobbying organization representing companies like Walmart and Amazon has asked India not to strengthen eCommerce mandates for companies outside of the country, Reuters reported on Friday (Jan. 29), citing a letter.
In response to local merchants’ complaints about U.S. eCommerce giants, India is considering revising its rules after allegations surfaced that Amazon and Walmart’s Flipkart devised ways to sidestep investment regulations.
India currently permits international eCommerce platforms to link buyers and sellers. Local retailers have accused U.S. behemoths of promoting only certain sellers and offering extensive discounts.
India changed its foreign direct investment (FDI) rules in 2018 to stop international firms from selling goods from merchants they have a financial stake in. The Indian government is weighing if those mandates should be solidified to extend to merchants’ parent companies.
Amazon could suffer if the revision is made because it has indirect stakes in two of India’s largest eCommerce players — Cloudtail and Appario.
In a letter on Thursday (Jan. 28), the U.S.-India Business Council (USIBC), part of the U.S. Chamber of Commerce, appealed to India to avoid restrictive changes to eCommerce investment rules.
“Any further changes in FDI rules would limit e-commerce firms from leveraging their scale,” USIBC said in the letter seen by Reuters.
USIBC also asked India’s Department for Promotion of Industry and Internal Trade (DPIIT) to engage in substantive consultation with companies on eCommerce regulation.
In March, India revised rules to tighten Big Tech oversight and required them to turn over data in a timely manner. A new policy drafted by India’s trade ministry also requested that a new official be appointed to enforce compliance. Laws passed in 2019 have proven difficult for eCommerce companies to comply with.
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