Amazon is urging the Indian government to relax its foreign investment regulations, seeking permission to purchase products directly from Indian sellers for export purposes, according to four sources familiar with the matter. Under current rules, foreign firms like Amazon and Walmart cannot directly sell to Indian consumers or export goods themselves, as they are restricted to operating as online marketplaces. These rules, aimed at protecting small local retailers, apply to both domestic sales and exports.
In a meeting with the Commerce Ministry on Thursday, Amazon executives requested that exports be exempted from this policy, which would allow the company to directly source products from Indian sellers for global markets. Flipkart also participated in the meeting.
Three trade associations representing small retailers opposed any policy relaxation, arguing that Amazon and Flipkart have long hurt small businesses by favouring large sellers and offering steep discounts. Amazon has stated it has helped generate $13 billion in Indian exports since 2015, aiming for $80 billion by 2030.
Government documents indicate no final decision has been made, with officials emphasizing the need to clearly separate goods meant for export from those sold locally.
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