India relaxes e-commerce investment rules for exports, benefiting Amazon

By Aditya Kalra Thu, July 23, 2026 at 6:08 AM PDT | 2 min read

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NEW DELHI, July 23 (Reuters) – India's government on Thursday relaxed foreign investment rules to allow e-commerce companies to purchase products directly from Indian sellers and sell them to overseas customers. The move marks a significant win for Amazon, which had lobbied for the change for months.

The policy shift comes at a time when India and the United States are struggling to finalize a trade agreement. India's e-commerce investment rules, which affect both Amazon and Walmart, have long been a point of contention between New Delhi and Washington.

A Rare Policy Easing

The decision represents a rare relaxation of India's tightly controlled e-commerce regime, which has historically barred foreign online retailers from buying and selling goods directly. Amazon and Walmart have argued that the restrictions limit their ability to expand, while retailer groups warn that any easing could give foreign firms an unfair advantage.

To protect millions of small retailers, India had previously allowed foreign e-commerce companies to operate only as online marketplaces that connect buyers and sellers. The government stated that the latest change is aimed at boosting exports.

In a statement, the government said the decision would "facilitate greater exports through easier and increased access of global markets."

Industry Reactions

Amazon told Reuters in a statement that the policy change would help manufacturers in smaller towns and cities reach overseas buyers and support its goal of achieving $80 billion in cumulative exports from India by 2030.

Walmart's e-commerce company in India, Flipkart, did not respond to Reuters queries.

Calls for Strict Oversight

The relaxation comes despite opposition from industry groups representing small retailers, who voiced concerns in closed-door meetings with the government last year.

The Confederation of All India Traders (CAIT), which represents millions of brick-and-mortar retailers, has argued that the change could be abused by foreign companies and give them greater control over supply chains.

In 2024, India's antitrust watchdog found that Amazon and Flipkart had breached competition laws by giving preference to select sellers on their platforms—allegations both companies deny.

"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," said Praveen Khandelwal, Secretary General of CAIT, in an interview with Reuters.

Market Context

Amazon and Flipkart are dominant players in India's e-commerce market, which is currently valued at roughly $90 billion. According to a joint report by Google and Deloitte published in April, the market is projected to reach $250 billion by 2030.

(Reporting by Aditya Kalra; Editing by Kirsten Donovan, Andrea Ricci, and Sanjeev Miglani)