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The Trump administration is aiming to urge India to permit online retailers, including Amazon and Walmart, complete access to its $125 billion ecommerce sector as a component of an ongoing trade deal, which is taking place under the potential threat of increased tariffs. U.S. government officials, industry executives, and lobbyists indicate that the United States plans to advocate for equitable conditions in the ecommerce sector during comprehensive negotiations on a U.S.-India trade agreement, which will also address areas like food and automotive industries.
U.S. Vice-President JD Vance met with Indian Prime Minister Narendra Modi in New Delhi on Monday. An Indian government statement reported that both parties “welcomed the significant progress in the negotiations for a mutually beneficial” trade agreement. They also recognized the “continued efforts towards enhancing cooperation in energy, defense, strategic technologies and other areas.”
India risks facing a 26 percent tariff on its exports to the U.S. unless an agreement is reached. President Donald Trump has postponed the imposition of the tariff for 90 days to facilitate negotiations.
Jeff Bezos, CEO of Amazon, had attended and contributed to Trump’s inauguration in January. Walmart’s CEO Doug McMillon engaged in one-on-one discussions with Trump at his Mar-a-Lago estate prior to the inauguration. McMillon, along with executives from other major U.S. retailers, was also present at the White House on Monday to discuss tariffs with the President.
One informed industry executive, requesting anonymity, mentioned that McMillon brought up India’s barriers against foreign ecommerce companies at Mar-a-Lago. Walmart currently owns the Indian online retailer Flipkart.
The U.S. initiative to open up India’s ecommerce market sees Bezos and McMillon contend against Asia’s wealthiest man, Mukesh Ambani, whose Reliance group is India’s leading retailer and owns numerous ecommerce platforms.
India allows U.S. ecommerce businesses to function only as online marketplaces for other sellers, while Indian companies can produce, own, and sell goods on their platforms. Washington labels this a “non-tariff barrier,” citing it alongside foreign direct investment restrictions in retail.
Arvind Singhal, Chair of retail consulting firm Technopak Advisors, stated, “Since 2006, the U.S. has been trying to open up India’s domestic market and has been successfully obstructed from doing so.”
In addition to the restrictions on inventory, U.S. retailers have encountered repeated product inspections by the Bureau of Indian Standards, according to industry executives, who remained unnamed due to the delicacy of the trade discussions.
Two industry executives informed the Financial Times that the Trump administration is closely collaborating with U.S. ecommerce platforms as part of the negotiations.
The White House, Amazon, Walmart, and Reliance did not respond to requests for comment.
Praveen Khandelwal, secretary-general of the Confederation of All India Traders and a Member of Parliament with Modi’s Bharatiya Janata Party, said, “The attempt to pressure India into opening its ecommerce sector wider for American giants like Amazon and Walmart reflects a broader pattern of economic diplomacy aimed at securing market dominance for its corporations.”
“While foreign investment is welcome, it must not come at the cost of distorting India’s retail ecosystem or undermining the interests of its [90 million] small traders,” he added.
Trump has criticized India’s protectionist policies, referring to it as the “tariff king.” As the largest trading partner of the U.S., both nations have expressed a desire to increase bilateral trade of goods and services to $500 billion, more than double the current volume.
Launched in India in 2013, Amazon has gradually expanded its presence but has fallen behind Flipkart. According to Bank of America analysts, Amazon had under 40 million daily active users in India towards the end of last year, compared to Flipkart’s 50 million.