The Indian government is considering a draft proposal aimed at relaxing export regulations, potentially allowing multinational e-commerce corporations like Amazon to directly procure goods from Indian vendors for overseas sales. Currently, foreign e-commerce firms are restricted to operating as online marketplaces, connecting buyers and sellers for a fee, both domestically and internationally. These limitations have been a long-standing point of contention between India and the U.S., with companies such as Amazon actively lobbying for the easing of export restrictions. According to a Reuters report, this potential policy shift surfaces as India and the U.S. seek to resolve trade-related differences.
Despite these considerations, the government faces opposition from associations representing numerous small brick-and-mortar retailers, who voice concerns that Amazon’s extensive financial resources could negatively impact their businesses. Reuters, referencing a DGFT proposal, notes that less than 10% of small Indian businesses engaged in domestic online sales also participate in global e-commerce exports, primarily due to complex documentation and compliance demands. The proposal suggests a third-party export facilitation model, where a dedicated export entity linked with e-commerce platforms would manage compliance aspects.
The DGFT draft emphasizes that the relaxed rules would strictly apply to exports, with stringent penalties for violations, including potential criminal charges. The proposal now awaits Cabinet approval. This development coincides with Amazon’s agreement to pay $2.5 billion to settle claims related to deceptive Prime subscription practices, following allegations of misleading millions of customers into enrolling in Prime. The FTC characterized this settlement as a major victory against ‘dark patterns’ in design. In other news, Amazon recently introduced its 10-minute delivery service in Mumbai, expanding after successful pilots in Bengaluru and Delhi. Amazon reports strong initial results, with daily orders increasing 25% month-on-month, and Prime members tripling their purchase frequency after adopting Amazon Now. Meanwhile, Amazon Seller Services, the marketplace arm of Amazon India, saw its FY25 losses decrease by nearly 90% to INR 374.3 Cr, with operating revenue rising 19% to INR 30,138.6 Cr.
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