E-commerce startups await clarity before cheering India-US trade deal

Walmart-owned Flipkart, Amazon, Meesho, Snapdeal, Myntra, Ajio, Nykaa Fashion are some of the most popular e-commerce platforms in India.

Indian e-commerce startups are still waiting for more details on what the landmark India-US trade deal means for their sector, before they celebrate and recalibrate plans, according to several industry stakeholders

To be sure, several of the prominent e-commerce firms in India already have very limited dealing with the US which is another reason why their initial excitement is limited. Walmart-owned Flipkart, Amazon, Meesho, Snapdeal, Myntra, Ajio, Nykaa Fashion are some of the most popular e-commerce platforms in India.

Good for consumption, e-commerce unfazed

“No material impact or relief at the moment, unless the non-trade barriers that are being dropped include some concessions for US e-commerce companies to hold inventory. That will practically still not change anything because they already hold inventory in some way or another,” a senior executive at a large Indian e-commerce startup said.

A founder at another e-commerce firm said it is “tough to comment on the details till the fine print is out. However, directionally it looks positive for the sector (for now).”

A third senior executive said his company is not making any amends or celebrating yet because the e-commerce sector will largely experience no change from any trade deal between two of the largest democracies in the world.

While sectors like e-commerce stand to gain very little from the first tranche of the India-US trade deal, other industries like IT services, GCCs, data centres, agriculture, technology and more will hugely benefit, at least according to preliminary information available.

“From a consumption point of view, it’s good that there is no cloud over the IT Services sector which could have been perhaps negatively impacted if Trump went berserk,” the first executive added.

IT, and tech at large, is one of the largest exports from India into the US and other regions. Clarity on that front helps Indian IT companies chart their growth plans accordingly since a bulk of their customer base is outside of India, with significant exposure to the US.

Seafood and agri companies rejoice

While tariffs on Indian exports to the US have been lowered from 50 percent to 18 percent, the tariffs on US imports into India have been eliminated as per the trade agreement.

So, while the larger e-commerce industry awaits details, certain sectors like seafood exports and more, within the realm of e-commerce, said the India-US trade deal would provide better infrastructure that will in turn formalise a fragmented market.

Eliminating tariffs on US imports improves access to advanced cold storage systems, processing equipment, and quality-control technologies that play a key role in food safety, shelf life, and consistency, according to Deepanshu Manchanda, MD at Zappfresh, a seafood exporter.

“Better access to proven global technologies can help improve reliability across sourcing, processing, and last-mile delivery, especially as businesses expand across cities and regions,” he concluded.