India Journalism Tech

Amazon, Walmart Foiled as India Tightens E-Commerce Rules

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That’s the headline of a story I wrote Thursday with my colleague Corinne Abrams. It begins:

India is tightening restrictions on foreign e-commerce companies operating in the country, in a new challenge to Inc. and Walmart Inc. as they bet billions on the nascent market.

Current rules forbid non-Indian online sellers from holding their own inventory and shipping it out to consumers, as is typically done in other countries. Instead, the foreign sellers have found a work-around, selling online what are effectively their own products but held by their affiliated local companies.

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We wrote more about the issue Friday in another story, which began:

American firms are plowing billions into India’s internet economy in part because, unlike China, India promised a level playing field for foreign firms to compete against local companies. Now that field may be tilting toward domestic startups amid a global backlash against U.S. tech titans, according to analysts and industry officials.

With national elections approaching early next year, India’s government said Wednesday it is tightening restrictions on foreign e-commerce players, the latest move in recent months that restrains their freedom to operate compared with local firms. The new rules present a fresh challenge to Inc. and Walmart Inc. as they aim for growing slices of a market where many of India’s 1.3 billion people are starting to shop online thanks to inexpensive smartphones and data.

Vinay Kesari, a Bangalore-based technology lawyer specializing in regulatory matters who has worked with U.S. tech firms, said such moves to rein in foreign tech companies have been highly unusual and may be a sign of more to come.

“I’ve never seen anything like this happening,” he said. “All bets are off at this point.”

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