September 30, 2025

India's government is cooking up a spicy new proposal that could change the game for e-commerce giants like Amazon! A recently leaked government document reveals plans to ease the tough foreign investment rules. If passed, Amazon and similar companies could directly buy Indian products from sellers and sell them overseas, something currently banned. Right now, foreign e-commerce firms in India can only act as marketplaces, connecting buyers and sellers without selling products themselves. This old rule has been a tug-of-war between India and the US, with Amazon pushing hard to loosen these export restrictions, as Reuters reports. Why now? The proposed changes come at a crucial time, as India and the US try to smooth out a long-pending trade deal. But not everyone is cheering. Small Indian shop owners, bundled together under the Confederation of All India Traders, are sounding alarms. They fear Amazon's strong financial muscle may threaten their businesses. Less than 10% of small Indian firms export online, stuck behind piles of paperwork and complex rules, the Directorate General of Foreign Trade says in their 10-page proposal reviewed by Reuters. The draft suggests a fresh "third-party export facilitation" system where a special export team linked to e-commerce platforms will handle all the compliance chaos. The proposal is set to be approved by India's cabinet soon, though the Directorate and Amazon stayed silent when Reuters asked for comments. Amazon argues this move could supercharge Indian sellers, pointing out it helped generate $13 billion in exports since 2015 and targets a whopping $80 billion by 2030. However, the Confederation’s national president, B C Bhartia, fears a "slippery slope," warning, "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." The government promises strict penalties and criminal action against anyone breaking the new rules. They want to start small with a pilot project and expand after checking its impact. Last year, Amazon faced heat from India's antitrust watchdog for allegedly breaking competition laws with deep discounting and favoritism towards some sellers—a charge Amazon firmly denies. So, will this bold plan help Indian sellers soar globally or put small shops in a tough spot? Time will tell!

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Tags: India, Amazon, E-commerce, Foreign investment, Exports, Trade policy,