New Delhi: India is under renewed pressure from the United States to fully open its booming e-commerce sector to American giants, Amazon and Walmart. Citing the report by Financial Times on Tuesday, the sources of the report include US government officials, lobbyists, and industry executives.
This issue will become a key agenda item for the US-India trade agreement discussions. These one's going to have a cross-sectional nature-from agriculture and automobiles to digital services, and so include heavy lobbying for equal market access.
The US is particularly looking at what it identifies to be regulatory hurdles that keep foreign-owned e-commerce platforms from operating freely in India's $125 billion digital retail space.
The concomitant actions are due to the apprehension in Washington that India, which has restrictive foreign direct investment (FDI) rules in place, are changing regulations that favor domestic players while such global companies are pouring billions into India.
Both Amazon and Flipkart, owned by Walmart, have said they invested so much but continue to face challenges such as data-localization policies, restrictions on product listings, and limits on controlling inventory.
The administration of President Donald Trump seems determined to deliver for US firms more favorable terms in this world's fast-evolving digital economy than they currently enjoy. Indeed, the US is expected to accompany any form of tariff and other such trade levers to convince India that foreign e-commerce players must also be brought in on the playing field.
India's response could have a terrific impact on the future trajectory with which the US would relate to India on trade and drive its e-commerce sector expansion pace in the future. At this point, this negotiation is taking place against the backdrop of India further trying to align its local businesses interest with the prospect of foreign investment against rapidly advancing digitization.
[Source Credit: Business Recorder]
