In a significant policy change, the Indian government has relaxed foreign investment rules for e-commerce companies, allowing them to purchase products directly from Indian sellers and export them to international customers. The move is expected to strengthen India’s export ecosystem while providing new opportunities for global e-commerce platforms.
The policy change comes at a time when India and the United States are working to finalise a trade agreement. Restrictions on foreign investment in India’s e-commerce sector have long been a point of discussion between the two countries.
The revised rules mark a rare easing of India’s tightly regulated e-commerce framework. Until now, foreign-owned e-commerce companies were allowed to operate only as online marketplaces connecting buyers and sellers and were not permitted to directly buy and sell products. The government said the latest decision is intended to “facilitate greater exports through easier and increased access of global markets.”
In a statement to a news agency, Amazon said the revised policy would help manufacturers from smaller towns and cities reach international customers and support its target of achieving $80 billion in cumulative exports from India by 2030. Walmart-owned Flipkart did not respond to requests for comment.
The policy change comes despite concerns raised by retail industry groups during discussions with the government last year. The Confederation of All India Traders (CAIT), representing millions of offline retailers, has argued that the relaxed rules could be misused by foreign companies and increase their control over supply chains.
Praveen Khandelwal, Secretary General of CAIT, said, “A robust monitoring mechanism must be put in place to ensure there is no misuse of this provision. Given the past track record of several large tech companies … strict oversight is essential.”
In 2024, India’s competition regulator found that Amazon and Flipkart had allegedly violated competition laws by favouring selected sellers on their platforms, allegations both companies have denied.
According to a Google and Deloitte report released in April, India’s e-commerce market is expected to grow from around $90 billion today to $250 billion by 2030.
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