Amazon wins as India allows foreign money into consumer ecommerce

This article is an on-site version of the India Business Briefing newsletter. To receive it in your inbox regularly, sign up if you’re a premium subscriber, or upgrade your subscription here.

Good morning. The events of the weekend feel both momentous and surreal. That a ragtag bunch of young people, united under the umbrella of a satirical party with a self-deprecating name, would be able to get Narendra Modi’s government to accede to their demands was not an outcome many predicted (certainly not the majority of India Brief poll takers). But here we are.

The important question now is, what happens next? Will this be a one-off, or is it the beginning of what will be a series of protests by citizens on various issues? Already, a group seems to be forming to push back against the government’s decision to have only ethanol-blended fuel available to customers. What do you think?

Lost in the noise of the Cockroach Janata Party last week were two significant wins for American companies in India. Delhi High Court has ruled that OpenAI’s use of content from an Indian news organisation does not constitute copyright infringement. But first, in a major win for the likes of Amazon, the government has decided to allow foreign investments in Indian ecommerce operations that sell directly to customers.

Ecommerce protections scrapped in hope of export boost

Until now, foreign direct investment in Indian ecommerce was restricted to companies operating in the business-to-business segment, or to platforms (such as Amazon) that did not hold their own inventory. After resisting for a long time, last week the Indian government finally cracked open the door to FDI for consumer-facing firms. But the revision is a careful one: it allows foreign money only for players exporting out of India, not for those selling domestically.

Small and medium-sized Indian traders have resisted any change to this policy, fearing that foreign competition would make the market tougher for them to survive…