The United States is set to press India for broader e-commerce access in upcoming trade talks, aiming to secure a level playing field for Amazon (NASDAQ: AMZN) and Walmart-owned Flipkart, according to a report from the Financial Times citing government officials, lobbyists, and industry executives.
The discussions come as President Donald Trump’s administration intensifies its use of trade pressure to drive concessions on market access, particularly in key sectors such as digital commerce, agriculture, and autos.
At the heart of the push is India’s $125 billion online retail market, one of the fastest-growing globally but also tightly regulated to protect local players. U.S. officials reportedly want Amazon and Walmart to be allowed to compete more freely, amid accusations that existing policies favor domestic firms and restrict foreign investment via indirect rules.
⚖️ Trade Leverage via Tariffs
The renewed pressure coincides with broader U.S.-India trade negotiations, which are expected to cover multiple sectors. Analysts say tariff relief on Indian exports—which face elevated duties under the Trump trade framework—may be linked to progress on e-commerce reforms.
“This is classic Trump trade strategy,” said a Washington-based trade attorney. “Tariffs are being used as a bargaining chip for regulatory concessions.”
India has historically maintained a protective stance toward its domestic retail industry, including restrictions on inventory-based e-commerce models and increased scrutiny over data localization and compliance frameworks.
🛍️ Amazon, Walmart Caught in Regulatory Limbo
Both Amazon and Walmart (NYSE: WMT) have made significant bets on India, seeing it as a key long-term growth market:
- Amazon has invested over $7 billion in its Indian operations since 2013
- Walmart acquired Flipkart in 2018 for $16 billion, its largest-ever overseas deal
However, both companies continue to face regulatory uncertainty, especially after several Indian court rulings and policy shifts limited their ability to operate at scale. These include limitations on deep discounting, control over sellers, and foreign direct investment (FDI) caps on retail structures.
U.S. negotiators are reportedly pushing India to relax or clarify these rules to ensure foreign-owned platforms are not disadvantaged relative to domestic firms.
🌍 Strategic Stakes: More Than Commerce
The talks also highlight how strategic economic ties are intersecting with geopolitical alliances. India and the U.S. have strengthened their defense and tech partnerships, but trade remains a lingering friction point.
While India is seeking greater export access and tariff relief, the U.S. is focused on market openness and investment protections. The outcome of these negotiations could set the tone for future digital trade rules between the two nations.
“The U.S.-India e-commerce dynamic will be a litmus test for how democratic nations approach digital sovereignty and trade openness,” said a former USTR official.
📉 Market Reaction
- Amazon shares were down 3.06%
- Walmart shares declined 0.87%
Both stocks have been under pressure amid broader tech weakness and investor concern over emerging market exposure.
