Government Considers Relaxing Export Regulations for Amazon and Other E-commerce Giants

To alleviate restrictions on foreign investment, the government has allegedly created a proposal permitting e-commerce multinationals such as Amazon to buy products directly from Indian vendors and sell them abroad.NEW DELHI, Sept 26 (Reuters) - A document revealed that the Indian government has prepared a proposal aimed at relaxing foreign investment regulations. This would permit e-commerce firms like Amazon (AMZN.O) to purchase products directly from Indian vendors and sell them to international customers.In India, foreign e-commerce firms are not permitted to sell products directly to consumers, whether domestically or internationally. They can only operate as a marketplace that connects buyers and sellers for a charge.As reported by Reuters, the policy has been disputed between New Delhi and Washington for years, with Amazon lobbying the Indian government to relax export rules. The suggested modifications align with initiatives from both India and the U.S. aimed at reconciling their disparities regarding a trade agreement that has been postponed for an extended period.

Additionally, the proposals reject the call from groups supporting millions of small Indian brick-and-mortar retailers for the government to deny Amazon's request based on the assertion that the financial power of the U.S. company poses a threat to their businesses. As stated in a 10-page proposal from The Directorate General of Foreign Trade, which is not public but was reviewed by Reuters on Thursday, less than 10% of small Indian businesses that sell online domestically engage in global e-commerce exports due to being "constrained by complex documentation and compliance requirements."The proposal foresees a model for facilitating exports through a third party, in which compliance would be overseen by a dedicated export entity connected to e-commerce platforms. Neither Amazon nor the directorate responded to Reuters' inquiries. The proposal will need to be approved by India's cabinet. As reported by Reuters, Amazon stated that the move will benefit Indian exporters; however, the Confederation of All India Traders, representing millions of traditional retailers, opposed the proposal on Friday. It was stated that this could be exploited by foreign companies, resulting in increased control over supply chains. B C Bhartia, the national president of the confederation, stated, "It will create a slippery slope, making it nearly impossible to monitor whether goods are genuinely meant for exports or being diverted into the domestic market."