Great e-commerce festival sales
E-tailers Amazon and Flipkart have both claimed top place in the festival sales saying the 2019 season was their biggest ever. Amazon's Great Indian Festival sales and Flipkart's Big Billion Days sales concluded on Friday.

At a time when India is pushing for an early trade deal with the US, a letter that Dough McMillon, chief executive of US retail giant Walmart, has written to Prime Minister Narendra Modi has assumed significance.

The letter, seeking more certainty and predictability in India's business environment, assumes added significance in view of the government's focus on improving the country's ranking on the ease of doing business index beyond the current 77 to catch up with China's 46th rank.

Walmart-owned Flipkart and rival US online retailer Amazon have been facing regulatory pressure in the country after record festival season-opening sales indicated that they could mop up nearly Rs 40,000 crore from the market, making brick-and-mortar retailers across the country uneasy.

Confederation of All India Traders (CAIT) has since complained to the Department for Promotion of Industry and Internal Trade (DPIIT) on foreign direct investment (FDI) norms violation by the e-tailing majors and to the competition czar of unfair practices, including deep-discounting.

Changes in foreign direct investment rules for e-commerce marketplaces late last year had upset Flipkart and Amazon, and forced them to overhaul their business models, according to Economic Times.

Walmart's disappointment was understandable as the changes had come months after it paid $16 billion to acquire Flipkart. The local units of both US companies are now facing probes over their alleged roles in predatory pricing that small retailers claim was forcing them out of business, the report says.

Washington has been putting pressure on New Delhi to ease the restrictions further which are among the hurdles to the early resolution of differences over trade between the two countries. The trade relations between India and the US have hit a new low, despite the apparent bromance between Prime Minister Modi and US PresidentDonald Trumpthat led to the latter attending the 'Howdy, Modi' extravaganza in Houston, Texas, last month.

Piyush Goyal discusses local sourcing with Walmart
Commerce Minister Piyush Goyal chats with Walmart International President and CEO Judith McKenna in his office. Goyal has been pushing for a trade deal with India at a time when the trade ties between the two countries have hit a new low.@PiyushGoyal/twitter

McMillon, who had met Modi in New York on September 25, has in his letter highlighted Walmart's commitment to India, including investments to empower small and medium enterprises, global sourcing from the country and potential job creation.

Goyal on India-US trade ties

Last week, commerce minister Piyush Goyal said the government was probing Flipkart and Amazon for any predatory pricing. The traders had approached Finance Minister Nirmala Sitharaman and the government seeking the formation of a Group of Ministers to probe the two companies' alleged violations.

In December, India put a 25 percent cap on the number of goods that an affiliate of a foreign-owned marketplace can supply to an independent seller on the platform. The ruling was put into effect soon after Walmart bought Flipkart. Before that, preferred sellers had accounted for a major chunk of the merchandise sold on the marketplaces of Flipkart and Amazon.

Flipkart's preferred sellers, code-named Alpha Sellers, also used to virtually source their entire merchandise from Flipkart's wholesale business prior to the changes in FDI rules that kicked in February.

Meanwhile, Goyal told the US-India Strategic Partnership Forum (USISPF) that every trade negotiator has to protect his country's interest, alluding to trade talks with the US. "And that is what I am expected to do for India. As long as both of us understand each other well, I see no problem," said Goyal.