The Trump administration is pushing India to ease restrictions on foreign ecommerce companies as part of broader trade talks, seeking to open one of the world’s fastest-growing online markets to U.S. firms, according to multiple sources.
During his recent four-day visit to India, U.S. vice president JD Vance made digital trade a key focus, calling for a more level playing field for American technology and retail companies. Speaking in Jaipur, Vance said the U.S. and India “have a tremendous opportunity to build a prosperous future together,” highlighting ecommerce as a critical area for deeper cooperation.
U.S. ecommerce companies in India
According to the Times of India, U.S. negotiators are pressing India to loosen rules that limit how foreign ecommerce players operate. These include demands for greater freedom around cross-border data flows, fewer restrictions on third-party marketplaces, and a rollback of strict data localization requirements (Times of India).
Since 2018, India has barred foreign ecommerce companies like Amazon and Walmart-owned Flipkart from holding inventory or selling directly to consumers, aiming to protect small traders. Washington argues these measures unfairly target U.S. businesses and stifle competition.
“No American company is asking for special treatment,” a U.S. trade official told Reuters. “We’re asking for consistent, transparent rules that don’t penalize foreign players simply for being foreign.”
While the Trump administration has not formally announced a new digital trade agreement, officials confirmed that digital services, cybersecurity frameworks, and ecommerce regulations are under active discussion as part of broader negotiations.
Indian officials have defended the current rules, citing the need to support local businesses and maintain data sovereignty. Yet analysts believe the U.S.-India strategic alignment on China could create space for compromise.
“The digital economy is one of the big missing pieces in U.S.-India relations,” said Tanvi Madan, senior fellow at the Brookings Institution. “Both sides know they have to find a way forward.”
Negotiators are aiming to complete a trade package, potentially including ecommerce provisions, by the end of 2025.
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