Let us know about free updates
The Trump administration intends to promote India to provide full access to the $125 billion e-commerce market to online retailers such as Amazon and Walmart, as part of a trade deal negotiated under the threat of rising tariffs.
Industry executives, lobbyists and US government officials say the US plans to seek a level playing field on e-commerce in a wider talks about the US-India trade agreement set up to cover the food to automobile sector as well.
According to a statement from the Indian government, US Vice President JD Vance met Modi in New Delhi on Monday. They also noted “continued efforts to strengthen cooperation in energy, defense, strategic technology and other areas.”
India faces 26% tariffs on exports to the US banning the agreement, and President Donald Trump has suspended action for 90 days to ensure negotiations are being made.
Amazon CEO Jeff Bezos attended and contributed to Trump’s inauguration in January, and Walmart’s Doug McMillon Chief was one of the industry leaders Trump met one-on-one at his Mar Lago Estate in line with it. MacMillon was also in the White House on Monday to discuss tariffs with the president along with executives from other major US retailers.
MacMillon raised the issue of India’s barriers to foreign e-commerce companies on Mar-a-Lago, said one industry executive who is aware of the details MacMillon asked not to name. Walmart owns Flipkart, an online retailer in India.
The US is about to praise open retailers in the world’s most populous country pit Bezo and MacMillon.
Indian Business Briefing
Indian experts are a must-read on business and policy in the world’s fastest growing economy. Sign up for our newsletter here
In India, e-commerce companies can only operate as an online marketplace for others to sell their products. Their Indian competitors can produce, own and sell goods through the platform. Washington calls it a “non-tariff barrier” and adds it to restrictions on foreign direct investment in retail.
“Since 2006, the US has been trying to open up India’s domestic market, and has been successfully stumped ever since,” said Arvind Singhal, chairman of retail consulting firm Technopak Advisors.
Industry executives say that US retailers are facing repeated product inspections by the Indian Standards Office, in addition to Indian curbs on inventory, and have called for them to not be identified due to sensitivity to trade consultations.
Two industry executives told the Financial Times that the Trump administration is coordinating closely with our e-commerce platform as part of the negotiations.
The White House, Amazon, Walmart, and Reliance did not respond to requests for comment.
Recommended
“Efforts to pressure India to open India wider for American giants like Amazon and Walmart reflect the broader pattern of economic diplomacy aimed at ensuring the market advantage of companies,” said Praven Kanderwal, head of all India’s trade officials and MP with Modi’s Bharatiya Janata Party.
“While foreign investment is welcome, we should not make the sacrifice of distorting India’s retail ecosystem or undermining the profits of small traders (90mn),” he added.
Trump said India’s protectionist policy made it “customer king.” The United States is their biggest trading partner, and both countries say they want to raise bilateral trade in goods and services to $500 million, more than twice their current amount.
Amazon has gradually built a presence in India since it launched in 2013, but has fallen behind Flipkart. According to analysts at Bank of America, Amazon had fewer than 40 million active users heading towards the end of last year in India until the end of last year.
