US Firms Urges India to Facilitate Foreign E-commerce Rules

The group which represents firms including Amazon.com and Walmart urged India not to tighten foreign investment rules according to Reuters report, on Saturday.

According to the report, India is considering revising the rules after traders in the country accused Amazon's Indian pision and Walmart's Flipkart of creating complex structures to bypass investment regulations. That change could hurt Amazon as it holds indirect stakes in two of its biggest online sellers in India, Cloudtail and Appario.

Moreover, the U.S.-India Business Council (USIBC), urged on Jan, the Indian government not to make any more material restrictive changes to e-commerce investment rules. "Any further changes in FDI rules would limit e-commerce firms from leveraging their scale," USIBC said.

Also, USIBC demaned India's Department for Promotion of Industry and Internal Trade (DPIIT) to engage in substantive consultation with companies on e-commerce regulation.

In 2018, the state changed its foreign direct investment (FDI) rules to deter foreign firms offering products from sellers in which they have an equity stake. The 2018 rule changes soured relations between India and the United States, as Washington said the policy changes favoured local e-commerce retailers over U.S. companies.

In contrast, Amazon declined to comment on the USIBC letter. Walmart and Flipkart did not respond to requests for comment.