Ahead of trade talks, US seeks level playing field for foreign e-commerce in India: Report

As per the US, this would create a “level playing field” between foreign and local e-commerce firms.

US trade negotiators are reportedly pressing India to allow foreign-owned e-commerce firms, including Amazon India and Walmart-owned Flipkart, to hold and sell their own inventory.

This could transform the country’s online retail landscape.

Currently, Indian law bars foreign-funded platforms from operating inventory-based models, forcing them to source goods from third-party vendors. Domestic players like Ajio, BigBasket, and Nykaa, however, can stock and sell their own products.

As per the US, this would create a “level playing field” between foreign and local e-commerce firms. The push comes alongside Washington’s demands for greater transparency in digital trade, cloud services, and logistics. India has been weighing these proposals while finalising its delayed comprehensive e-commerce policy, which aims to regulate data governance, competition, and consumer protection, states a report by the Mint.

Trade bodies like the Confederation of All India Traders (CAIT) have warned that permitting foreign-owned platforms to hold inventory could undermine small retailers and violate India’s FDI policy, it has been learnt from the report. The current restriction, enforced through Press Note 3 (2016), is meant to prevent market manipulation and protect domestic competition.

Moneycontrol could not independently verify the report.

As per officials cited in the Mint report, India may pilot inventory-based exports first, allowing foreign e-commerce firms to hold stock for overseas buyers without breaching the domestic marketplace-only rules. Export hubs under the new framework aim to simplify logistics, GST refunds, and inter-state movement for small exporters.

While US-India trade talks are temporarily on hold due to Washington’s government shutdown, negotiations are expected to resume, with the bilateral trade agreement (BTA) targeted for conclusion in November.