Amazon, Walmart at centre of US push for India e-commerce access in trade talks

The renewed US push for e-commerce reform pits Amazon and Walmart’s India ambitions against dominant local players like Reliance Retail, whose swift expansion across physical and digital commerce is reshaping the market and hindering foreign entry

The United States is reportedly ramping up diplomatic efforts to secure wider entry for American online retail giants into India’s £125 billion e-commerce sector, placing trade pressure firmly at the heart of ongoing negotiations. As part of a broader strategy to reshape US-India trade relations, Washington is lobbying for fairer market conditions for Amazon and Walmart, currently limited by India’s restrictive foreign investment rules, as per reports.

Talks have gained traction following a meeting between Prime Minister Narendra Modi and US Vice President JD Vance in New Delhi on April 21. According to Indian officials, both sides recognized "significant progress" toward a mutually beneficial trade agreement that spans industries from agriculture and automobiles to defence and strategic technology.

Central to the discussions is the demand for India ecommerce market access reform. Current regulations prohibit foreign e-commerce firms from owning inventory and selling directly to consumers, forcing them to operate as third-party marketplaces. Meanwhile, Indian players like Reliance Industries—led by Mukesh Ambani—face no such limitations. US officials argue this disparity creates an uneven playing field and constitutes a non-tariff trade barrier.

Retail access becomes trade flashpoint

The US pressure on the Indian retail sector has intensified, with Walmart CEO Doug McMillon and Amazon executives actively engaging with US trade officials. McMillon, whose company owns Flipkart, reportedly addressed India’s investment restrictions during a private discussion with President Trump at Mar-a-Lago, underscoring the stakes for American retailers eyeing expansion.

This renewed push for reform places the India market ambition of Amazon and Walmart in direct competition with powerful domestic conglomerates. Reliance Retail’s rapid growth in both brick-and-mortar and digital commerce is reshaping the industry, complicating foreign firms’ entry.

Adding urgency to the negotiations is the looming threat of a 26% tariff on Indian exports to the US—temporarily suspended for 90 days. The reprieve, granted by President Trump, is widely seen as a tactical move to create room for productive dialogue.

“Since 2006, the US has tried to open India’s domestic retail market,” said Arvind Singhal, Chairman of Technopak Advisors. “But India has held its ground.”