The current regulatory framework allows US ecommerce firms to act only a marketplace, where other sellers list their products
In a push for a level playing field in the country’s ecommerce landscape, the United States may press India to allow full access to its USD 125 billion ecommerce market to Amazon and Walmart’s Flipkart, as per the media reports.
The reports added that these developments are a part of a broader India-US trade deal that is likely to include various sectors, covering food and automobiles as well. While the Donald Trump-led administration imposed a 26 per cent tariff on India, it was later paused for 90 days. According to the reports, the US is aiming to secure a level playing field.
As far as the regulations are concerned, the current framework allows US ecommerce firms to act only a marketplace, where other sellers list their products. On the other hand, the rules for the Indian rivals state that they can own, manufacture and sell products on their online platforms, the reports added, while highlighting that the country also caps the foreign direct investment (FDI) in retail.
With reports highlighting that the Trump government is working closely with ecommerce firms on the aspects of the trade strategy, this becomes crucial as India and US have finalised the Terms of Reference for a potential trade deal to guide the forthcoming talks.
On the other hand, the trade bodies in India have been very vocal in their criticisms against the operations of ecommerce firms. Highlighting that the traditional retail sector is under siege by companies that are violating laws, manipulating markets and systematically dismantling small retailers for profit, the industry bodies have urged the government to impose a luxury tax under Goods and Services Tax (GST) on the purchase of goods from ecommerce platforms.
Taking aim at Amazon and Flipkart, Kailash Lakhyani, Chairman of the All India Mobile Retailers Association (AIMRA), called them repeat offenders who have exploited India’s legal loopholes for over a decade. “Using a maze of group entities and preferred sellers, these companies bypass foreign direct investment (FDI) restrictions to dominate every layer of the supply chain while sidelining Indian retailers,” Lakhyani highlighting at the national conclave on ‘cruel face of quick commerce and ecommerce’ held at the Constitution Club, New Delhi.
Demanding immediate enforcement of FDI and ecommerce policies and rolling out of ecommerce rules under the Consumer Protection Act, the Confederation of All India Traders (Cait), in association with All India Consumer Products Distributors Federation (AICPDF), Organised Retailers Association (ORA) and AIMRA, sounded a nationwide alarm against the unchecked and unethical operations of both foreign-funded ecommerce giants and the Indian quick commerce platforms.
