India considers revising its foreign investment rules for e-commerce

In a move that could compel players like Amazon.com Inc, Flipkart to restructure their ties with some major sellers, India is considering revising its foreign investment rules for e-commerce. The discussions on the part of the government coincide with a growing number of complaints from India’s bricks-and-mortar retailers which have for years accused Amazon and Walmart Inc-controlled Flipkart of creating complex structures to bypass federal rules.

India only allows foreign e-commerce players to operate as a marketplace to connect buyers and sellers. It prohibits them from holding inventories of goods and directly selling them on their platforms.

 Amazon and Flipkart were last hit in December 2018 by investment rule changes that barred foreign e-commerce players from offering products from sellers in which they have an equity stake.