US Presses India to Open $125 Bn Ecommerce Market to Amazon, Walmart

The Trump administration has started discussions with India to potentially open up its $125 billion ecommerce market to American giants like Amazon and Walmart, according to a report published by The Financial Times. The talks are part of broader negotiations around a US-India trade agreement that is expected to voer multiple sectors, including automobiles and food.

Arvind Singhal, chair of retail consulting firm Technopak Advisors, as quoted by FT, stated that the US has been trying to open up Indian domestic market since 2006. According to India’s current regulatory framework, US ecommerce firms can only act like a marketplace.

However, Indian competitors operate under different rules—they’re allowed to manufacture, own, and sell products directly through their online platforms. Washington has labeled this a “non-tariff barrier,” while India maintains restrictions on foreign direct investment in retail to protect domestic interests.

This came after Trump slapped India with a 26% tariff which has later been paused for 90 days. US Vice President JD Vance, who is currently on a four-day visit to India, has already acknowledged progress in these negotiations during a meeting with Prime Minister Narendra Modi.

Amazon, Walmart Ramp Up

Currently, American ecommerce giants are seeking the removal of existing restrictions that restrict their operations only as online marketplaces. They are looking for a level playing field with Indian giants such as Mukesh Ambani’s Reliance Group, which dominates the country’s retail landscape as its largest player.

For instance, Reliance, a formidable rival, can produce, own, and sell goods through its platforms. The US administration considers India’s ecommerce restrictions to be “non-tariff barriers,” comparable to curbs on foreign direct investment in the retail sector.

Walmart owns India’s homegrown ecommerce player Flipkart, while Amazon has been steadily expanding its presence since entering the market in 2013. However, Amazon trails Flipkart in terms of user engagement — as of late last year, Amazon had fewer than 4 crore daily active users in India, compared to Flipkart’s 5 crore, according to analysts at Bank of America.

The United States continues to be India’s largest trading partner, with both nations aiming to double their bilateral trade in goods and services to $500 billion—a goal that underscores the deepening economic ties between the two.