Foreign Online Retailers Ask India to Allow Direct Sales


NEW DELHI--Global online retailers such as Amazon.com Inc. AMZN +0.58% have asked New Delhi to amend a law which prohibits their Indian units from selling directly to consumers, a senior trade ministry official said Tuesday.
"We will consider the requests, but it has to be a political decision," the official, who didn't want to be identified, told The Wall Street Journal.
He declined to say which other companies had made similar requests.
The official's comments come as Paul Misener, Amazon's global vice president, met Indian Trade Minister Anand Sharma Tuesday.
Mr. Misener told reporters after the meeting that the discussion covered "different issues," including the possibility of changes in the policy that currently restricts them from retailing in India.
Amazon's interest in expanding in India comes at a time when local startups such as Flipkart.com and Snapdeal.com have found acceptance in the country's growing online retail market.
Despite low internet usage, India's e-commerce market has recently shown encouraging signs of growth and attracted several global companies.
New Delhi-based consultancy Technopak Advisors predicts a $70-billion annual market for online shopping in India by 2020, up from $600 million now.
U.S.-based Amazon entered India in February 2012 with the launch of its price-comparison platform Junglee.com. But users cannot buy directly from the website.
It only allows potential customers to compare prices. They can then shop online by following a link to the seller's website or visit the shop in person.
"Amazon's intent in launching Junglee.com was to have a presence in the Indian market till rules are changed to allow them to do business here," said Ankur Bisen, vice president at Technopak.
Mr. Bisen added that foreign online retailers are meeting government officials to make a case for permission to sell direct to customers.
Currently, Indian customers can buy direct only from Amazon's global sites, but this puts the company at a disadvantage because shipping costs are higher and delivery takes longer.
Last September, India introduced several policy changes, including allowing foreign retailers such as Wal-Mart Stores Inc. WMT 0.00% to invest in local supermarket operations. But online retailers were left out.
Mr. Bisen said a lack of a proper understanding of the way online retailers function could have prevented the government from allowing them to operate locally.
The federal government's move to relax foreign investment rules in the retail sector has sparked political opposition, with opponents saying local mom-and-pop stores won't be able to compete with foreign retailers