Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT) may get Trump assistance in India

For 40 years there has been talk that India represents a holy grail for US businesses, providing an opportunity for sales and investment.

As tension between the US and China has increased since President Donald Trump first took office in 2016, US companies have increasingly looked at India as an alternative to China. Apple (NASDAQ: AAPL), for example, has moved some of its manufacturing operations to India from China.

The US’ two biggest retailers–Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT)—are trying to get in on the action, too. Specifically, they want full access to India’s retail market, estimated at $60 billion to $125 billion. India is the world’s most populous nation, with 1.46 billion residents.

Amazon and Walmart apparently have President Trump on their side. The White House plans to urge India to give US Internet retailers complete access to its online market, say industry executives, lobbyists and government officials, according to the Financial Times.

Some freedom, some restriction 

As for the companies’ current activity in India, Karthik Anbalagan, CEO of digital marketing consultant Ordersus, offers an interesting analysis of Amazon on LinkedIn. The company launched its online sales market in India 12 years ago, aiming to become No. 1 in the space, he says. 

“A decade later, it has not only achieved this but has also transformed India’s e-commerce landscape. Today, Amazon India is a household name, known for its vast product range, lightning-fast delivery, and consumer-first approach.”

Still, Amazon faces some restraints on its sales and inventory from an Indian government that wants to protect its own industry from foreign domination. 

US online retailers can do business in India only as marketplaces for others to sell their products. Indian companies, of course, can make and then sell goods through their online platforms. Also, US retailers endure frequent product inspections by the government, the FT reports.

Progress is difficult

“Since 2006, the US has been trying to open up India’s domestic market, and has been stymied successfully,” Arvind Singhal, chairman of retail consulting firm Technopak Advisors, tells the paper.

Media reports say Amazon is considering spinning off its Indian unit and listing it on an Indian exchange, so it wouldn’t have to deal with all the regulatory hurdles. 

Looking at Walmart, it has been involved in India since 2007. It owns an 85% stake in Flipkart, an online Indian retailer. It too faces government restraints, just like Amazon.

India’s history has been to allow foreign companies into the country, but with restrictions. Perhaps the Trump administration can change that for Amazon and Walmart. But the Indian government may not give in, at least not fully.