Is Amazon’s foray into the Indian market in jeopardy? That seems to be the implication of a decision by the Indian government (via ZDNet) that means companies with foreign direct investment (FDI) can’t sell products online in the country. It remains to be seen how the rules will be implemented, whether exceptions will be made, and if loopholes can be found, but for now Amazon would seem to be facing something of a bureaucratic nightmare.
The Indian government has been changing its rules regarding FDI in recent years, offering opportunities in some areas while closing them in others. It’s hard to believe that Amazon would have launched its latest Indian moves if there was any sign of such a huge problem developing, and there’s obviously room for Amazon to be given breathing space if the Indian government is minded to do so. But will protectionist impulses kick in and drive Indian policy to promote domestic online retailers at the expense of global giants such as Amazon?
Kindle sales via Indian firms and websites should be fine, but it’s questionable whether Amazon’s India-specific store (including its ebook bookstore) will be allowed now that the new rules are in place. If the new rules are strictly enforced to both the spirit and the letter of the law, Amazon’s Indian ventures would seem to be in trouble.