India May Pause E-comm Policy as Trump's Entry Spurs Caution

India's proposed comprehensive e-commerce policy that has drawn strong interest from global entities such as Amazon and Walmart may be put on the back-burner, two people aware of the matter said, as countries pause and reassess priorities in the wake of an eventful regime change in the US.

- Dhirendra Kumar

The development also signals a more cautious approach to regulating the sector as India weighs the potential impact on foreign investments and domestic e-commerce players in the evolving global trade landscape.

"It is not the right time to go ahead with the release of the e-commerce policy, given the changing global geopolitical scenario," one of the two people said on the condition of anonymity. "With trade dynamics shifting and uncertainties looming, we need to carefully assess the potential impact before moving forward."

With Washington adopting a more protectionist stance under the Donald Trump presidency, India is recalibrating its approach, focusing on broader trade negotiations and strategic partnerships.

The policy, which aims to tighten regulations on data governance, competition and consumer protection, is currently being evaluated at the top level of the Indian government. It was also designed to regulate online marketplaces better, creating a fair and competitive environment. However, the policy has faced resistance from foreign e-commerce giants because of proposed restrictions on foreign direct investment, data localization requirements and increased compliance burden, among others.