US delegation to discuss India's new e-commerce rules during trade talks

WION Web Team New Delhi, Delhi, India Jul 12, 2019, 02.10 PM(IST)

Logo of e-commerce firm Amazon and Flipkart. Photograph:( Reuters )

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The new rules barred companies from selling products via firms in which they have an equity interest and also from making deals with sellers to sell exclusively on their platform.

A US delegation is in New Delhi to hammer out differences over India's new investment rules for the e-commerce which has considerably grown in size in last one decade. The bone of contention is a rule put in place by Prime Minister Narendra Modi just before the Lok Sabha elections.

The new rules barred companies from selling products via firms in which they have an equity interest and also from making deals with sellers to sell exclusively on their platform.

It was done to protect India's small trader community which forms the political backbone of BJP. Small traders in India had been complaining to the government for a long time that they are steadily losing their business to foreign e-commerce giants. While the new rule helped the Indian business, it was not taken kindly by the US e-commerce giants.

It is learnt that Walmart told the US government privately in January that India's new investment rules for e-commerce were regressive and have the potential to hurt trade ties. Walmart had invested US $16 billion in Indian e-commerce giant Flipkart, its biggest acquisition ever globally.

India's Commerce Minister Piyush Goyal has said that the government was committed to protecting small traders, but open to ironing out policy-related issues. Goyal said on Twitter on Wednesday that he met Walmart international CEO Judith MC Kenna and discussed ways of boosting sales of Indian made products.

Walmart told the United States trade representative in January that its unit Flipkart, as well as Amazon, had opened many new distribution centres over the past three years in India, creating thousands of jobs and benefitting the customers.

The US delegation will return on Friday after concluding talks with the Indian government.