By Ravi Agrawal & Kathryn Salam, Foreign Policy
Welcome to Foreign Policy’s weekly South Asia Brief. The highlights this week: India hits Amazon and Walmart with an antitrust case, a Pakistani high court overturns an ex-leader’s death sentence, and why Bangladesh arrested a top Sufi singer.
The World’s Richest Person Goes to India
When Amazon founder and CEO Jeff Bezos decided to visit India this week, he may have imagined the country and its struggling economy would welcome him with open arms. It seems the opposite will happen. On Monday, India’s antitrust regulator ordered a formal probe of allegations that Amazon and Walmart’s Flipkart were promoting some brands over others—practices that would violate Indian laws requiring foreign-owned e-commerce businesses to be neutral marketplaces.
It’s not just legal trouble that awaits the world’s richest man in India. On Wednesday, a trade union representing 70 million brick and mortar retailers has planned protests in 300 cities. “Bezos and Amazon have already destroyed many small businesses and are now trying to build a false narrative of empowering small retailers,” Praveen Khandelwal, the leader of the Confederation of All India Traders, told Bloomberg.
Economic dilemma. New Delhi needs all the foreign investment it can get: New projections show that India’s economy will grow by just 5 percent this year. Given the immense potential market in India, major players such as Amazon and Walmart have long jostled for influence in the e-commerce space. But the small merchants whose trade lobby is organizing Wednesday’s protests control 90 percent of India’s retail, and they broadly support protectionist measures.
There is also often widespread opposition to privatization in India. Last week, banks and businesses closed as millions of workers protested against proposed government divestment from creaking enterprises such as Air India, Bharat Petroleum, and the Shipping Corporation of India. The workers fear the job cuts that would inevitably follow private ownership.
Local challenge. When India introduced new laws in 2018 barring foreign-owned companies from selling their own inventory—forcing companies such as Amazon to operate more like eBay and sell only third-party goods—it opened the door for local companies to exploit the e-commerce market. Reliance, the country’s biggest company by market capitalization, is jumping into the fray with Jiomart. If the platform succeeds, it could link up the millions of mom and pop stores around India, creating better supply chains. But it would be yet another sign to foreign companies that New Delhi can change its laws at any time to favor its own.
As shown below, India has the world’s largest population of people who have yet to use the internet—another reason why foreign companies such as Google, Facebook, Apple, and Uber see it as a massive potential growth market.