<p>A US lobby group which represents firms including Amazon and Walmart has urged India not to tighten foreign investment rules for e-commerce companies again, according to a letter seen by Reuters.</p>.<p>India is considering revising the rules after traders in the country accused Amazon's Indian division and Walmart's Flipkart of creating complex structures to bypass investment regulations, Reuters reported this month.</p>.<p>The US companies deny any wrongdoing.</p>.<p>India only allows foreign e-commerce players to operate as a marketplace to connect buyers and sellers but local traders say the US giants promote select sellers and offer deep discounts, which hurts business for smaller local retailers.</p>.<p>In 2018, India changed its foreign direct investment (FDI) rules to deter foreign firms offering products from sellers in which they have an equity stake.</p>.<p>The government is now considering tightening those rules again to include sellers in which a foreign e-commerce firm holds an indirect stake through its parent, Reuters reported.</p>.<p>Such a change could hurt Amazon as it holds indirect stakes in two of its biggest online sellers in India, Cloudtail and Appario.</p>.<p>Citing the Reuters story in a Jan. 28 letter, the US-India Business Council (USIBC), part of the US Chamber of Commerce, urged the Indian government not to make any more material restrictive changes to e-commerce investment rules.</p>.<p>"Any further changes in FDI rules would limit e-commerce firms from leveraging their scale," USIBC said in the letter seen by Reuters.</p>.<p>USIBC also asked India's Department for Promotion of Industry and Internal Trade (DPIIT) to engage in substantive consultation with companies on e-commerce regulation.</p>.<p>USIBC and DPIIT did not respond to a request for comment.</p>.<p>After the Reuters story was published last week, the Confederation of All India Traders (CAIT), which represents millions of brick-and-mortar retailers, said it has received assurances from India's commerce minister that policy changes were in the offing.</p>.<p>On Saturday, CAIT in a statement said the USIBC letter was an "uncalled for intervention" which runs against the interest of 85 million traders. "Such a hue and cry is not understandable," CAIT said, adding that it had also written a letter in protest to the USIBC President.</p>.<p>The government is also considering prohibiting online sales by a seller who, for example, purchases goods from an e-commerce entity's wholesale unit, or any of its group firms, and then sells them on the entity's websites, Reuters has reported.</p>.<p>The 2018 rule changes soured relations between India and the United States, as Washington said the policy changes favoured local e-commerce retailers over US companies.</p>.<p>Industry sources told Reuters on Friday that the prospects of such frequent policy changes in India have alarmed Amazon, which has committed $6.5 billion in investments in India, and Walmart, which invested $16 billion in Flipkart in 2018.</p>.<p>The USIBC letter said "investments require reasonable policy predictability and fair treatment".</p>.<p>"USIBC is concerned that material changes to the FDI policy creates uncertainty and impacts investor confidence, as well as business continuity of existing investments," it said.</p>.<p>Amazon declined to comment on the USIBC letter. Walmart and Flipkart did not respond to requests for comment.</p>
<p>A US lobby group which represents firms including Amazon and Walmart has urged India not to tighten foreign investment rules for e-commerce companies again, according to a letter seen by Reuters.</p>.<p>India is considering revising the rules after traders in the country accused Amazon's Indian division and Walmart's Flipkart of creating complex structures to bypass investment regulations, Reuters reported this month.</p>.<p>The US companies deny any wrongdoing.</p>.<p>India only allows foreign e-commerce players to operate as a marketplace to connect buyers and sellers but local traders say the US giants promote select sellers and offer deep discounts, which hurts business for smaller local retailers.</p>.<p>In 2018, India changed its foreign direct investment (FDI) rules to deter foreign firms offering products from sellers in which they have an equity stake.</p>.<p>The government is now considering tightening those rules again to include sellers in which a foreign e-commerce firm holds an indirect stake through its parent, Reuters reported.</p>.<p>Such a change could hurt Amazon as it holds indirect stakes in two of its biggest online sellers in India, Cloudtail and Appario.</p>.<p>Citing the Reuters story in a Jan. 28 letter, the US-India Business Council (USIBC), part of the US Chamber of Commerce, urged the Indian government not to make any more material restrictive changes to e-commerce investment rules.</p>.<p>"Any further changes in FDI rules would limit e-commerce firms from leveraging their scale," USIBC said in the letter seen by Reuters.</p>.<p>USIBC also asked India's Department for Promotion of Industry and Internal Trade (DPIIT) to engage in substantive consultation with companies on e-commerce regulation.</p>.<p>USIBC and DPIIT did not respond to a request for comment.</p>.<p>After the Reuters story was published last week, the Confederation of All India Traders (CAIT), which represents millions of brick-and-mortar retailers, said it has received assurances from India's commerce minister that policy changes were in the offing.</p>.<p>On Saturday, CAIT in a statement said the USIBC letter was an "uncalled for intervention" which runs against the interest of 85 million traders. "Such a hue and cry is not understandable," CAIT said, adding that it had also written a letter in protest to the USIBC President.</p>.<p>The government is also considering prohibiting online sales by a seller who, for example, purchases goods from an e-commerce entity's wholesale unit, or any of its group firms, and then sells them on the entity's websites, Reuters has reported.</p>.<p>The 2018 rule changes soured relations between India and the United States, as Washington said the policy changes favoured local e-commerce retailers over US companies.</p>.<p>Industry sources told Reuters on Friday that the prospects of such frequent policy changes in India have alarmed Amazon, which has committed $6.5 billion in investments in India, and Walmart, which invested $16 billion in Flipkart in 2018.</p>.<p>The USIBC letter said "investments require reasonable policy predictability and fair treatment".</p>.<p>"USIBC is concerned that material changes to the FDI policy creates uncertainty and impacts investor confidence, as well as business continuity of existing investments," it said.</p>.<p>Amazon declined to comment on the USIBC letter. Walmart and Flipkart did not respond to requests for comment.</p>