The US plans to encourage India to provide greater access to its US$125 billion ecommerce market for companies such as Amazon and Walmart.

This information comes from a report by the Financial Times published on April 22, 2025.

The report cites industry executives, lobbyists, and US government officials.

They indicate that this issue will be a significant topic in ongoing discussions regarding a US-India trade agreement.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The evolving U.S.-India trade relationship provides context for e-commerce tensions

The current push for e-commerce access is part of a much longer economic relationship that has transformed dramatically since India’s independence in 1947.

U.S.-India relations evolved from Cold War tensions to a strategic partnership, with bilateral trade reaching a record $157 billion in 2021, making the U.S. India’s largest trading partner 1.

Despite this growth, the relationship remains imbalanced, with the U.S. running a $45.7 billion goods trade deficit with India in 2024, representing a 5.4% increase from the previous year 2.

This persistent and growing trade deficit explains why the U.S. administration is prioritizing market access issues in negotiations, particularly in high-growth sectors like e-commerce where American companies have global competitive advantages.

The broader strategic partnership now encompasses security, technology, and regional stability, creating a complex negotiating environment where e-commerce represents just one aspect of a multifaceted relationship.

2️⃣ India’s protective e-commerce regulations reveal broader economic strategy

India’s e-commerce policies restrict foreign companies from selling products from affiliated firms and prevent exclusive deals and discounts, directly impacting Amazon and Walmart’s business models 3.

These regulations emerged from concerns about protecting local retailers and preventing foreign companies from leveraging their market position unfairly, explaining why the U.S. is specifically seeking a “level playing field” 4.

Both companies have had to adapt their strategies while facing legal challenges—Walmart spent $16 billion to acquire Flipkart to strengthen its position, while Amazon has fought legal battles to prevent competitors like Reliance from acquiring retail assets 56.