India’s partial e-commerce FDI opening may hurt competition
Argument
India’s partial FDI opening for e-commerce may distort competition more than a clean ban, Shanker Singham of the Competere Foundation argues. He says the July 2025 change lets foreign investment into inventory-led e-commerce only when the goods are meant for export, which still picks winners and losers among business models.
Assessment
His larger point is that India’s policy cost is not just the ban itself but the patchwork of exceptions and extra rules around it. The report he cites says anti-competitive market distortions could cost the economy about $173.6 billion over five years, with foreign-investment limits making up the biggest share of that estimate, though that figure is an estimate from the report rather than a tested outcome.
Counterpoints
Singham accepts that national security can justify restrictions, but says the test should be whether the same goal can be reached in the least anti-competitive way possible.
The government’s manufacturing-for-export aim may still be valid, but he says it does not by itself solve the competition problem created by selective FDI rules.