Amazon lobbies Indian government to ease its foreign investment rules

Amazon is lobbying the Indian government to ease its foreign investment rules to allow the US company to buy products directly from Indian sellers to sell in overseas markets, four people with direct knowledge of the matter said.

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India currently prohibits companies like Amazon and Walmart from stocking and selling goods directly to consumers, allowing them only to operate an e-commerce marketplace to connect buyers and sellers for a fee. The restrictions, which aim to protect small retailers, also apply to exports.

Amazon executives asked the Indian Commerce Ministry in a meeting on Thursday to exempt exports from the policy - which would allow Amazon India to buy the goods itself from sellers to sell to international customers, the four sources said.

The policy restrictions that Amazon and Walmart face have for years been a sore point between New Delhi and Washington, which are also currently struggling to strike a trade deal.

Three industry groups backing small retailers opposed any more easing of restrictions for Amazon and Walmart's Flipkart - which also attended the meeting, the sources added.

The retailer groups reiterated their long standing concerns that Amazon and Flipkart have hurt small Indian retailers for years by favouring select big sellers online, and offering discounts, which hurt smaller businesses.

The US companies have always maintained they comply with Indian laws. On Friday, Amazon India and Flipkart did not respond to Reuters queries.

India's Commerce Ministry did not immediately respond to Reuters queries.