Amazon has urged the Indian government to ease foreign investment restrictions that prevent the U.S. giant from directly purchasing goods from Indian sellers for exports, according to people familiar with the matter.
At present, India bars foreign e-commerce firms such as Amazon and Walmart-owned Flipkart from stocking and selling goods directly to consumers, limiting them to operating as online marketplaces. The restrictions also extend to exports. In a meeting with the Commerce Ministry on Thursday, Amazon executives sought an exemption for exports, arguing the move would help small businesses access international markets and streamline customs clearance processes.
The proposal, however, met stiff resistance from industry groups representing small retailers, who reiterated their long-held concerns that Amazon and Flipkart have harmed local businesses by favouring select sellers and offering deep discounts. Flipkart also attended the meeting.
“It was a heated meeting … the small traders and their supporters opposed it saying they wanted no concession for foreign e-commerce players,” said one participant.
Government documents reviewed by Reuters show New Delhi has yet to make a decision. Officials are weighing whether exemptions for exports can be structured in a way that prevents foreign firms from directly selling goods to Indian consumers, a scenario that could hurt small retailers.
Amazon, which has said it enabled $13 billion in cumulative exports from India since 2015 and aims for $80 billion by 2030, is one of the largest players in India’s booming e-commerce sector, valued at $125 billion in 2024 and projected to reach $345 billion by 2030, according to the India Brand Equity Foundation.
Neither Amazon India, Flipkart, nor the Commerce Ministry responded to queries on the matter.