Across India’s cities and towns, e-commerce and ‘quick commerce’ platforms are revolutionising traditional retail, threatening the livelihoods of millions of small shopkeepers, entrepreneurs, street vendors, and local manufacturers. The unfortunate aspect is that both new and old players are achieving this by flouting the laws, and despite policymakers being aware of these illegal activities, they have been slow to act and level the playing field.

Over the past decade, giants like Amazon and Walmart-owned Flipkart have reshaped Indian retail through immense scale, aggressive discounting, and complex seller networks. Consumers have benefited from low prices and a vast selection online, but local producers and shopkeepers have suffered. Walmart, notorious for its impact on the US economy by driving down prices and destroying both manufacturing and small businesses, found a way into Indian retail through e-commerce after its initial entry was blocked. The current homelessness and opioid crisis in the US can be traced back to job losses or jobless growth. Similar destruction of small businesses and entrepreneurship is unfolding rapidly in India, creating the same conditions.

Industry estimates suggest that up to 70 per cent of the items sold on Amazon and Flipkart are of Chinese origin, indicating that India’s e-commerce boom has favored cheap imports over domestic manufacturing. These imports are routed through companies owned and operated by e-commerce giants in countries like Singapore to exploit FTA and tax rules. Despite the Indian government being aware, there is no action to prevent this, including enforcing rules for disclosing the origin of products on their websites.

From toys to electronics, the influx of low-cost Chinese goods has made it tough for Indian MSMEs (micro, small, and medium enterprises) to compete, even in categories where local industry once thrived. A detailed 2024 study by the Global Trade Research Initiative found that Chinese imports have captured over 52% of India’s toy market (despite high import tariffs) and majority shares in products like umbrellas, leather goods, and glassware, displacing many local producers. Domestic manufacturers are not benefiting from the e-commerce surge, as consumers often prefer the cheaper, mass-produced imports available online.

This challenge is compounded by the way major e-commerce marketplaces operate through “preferred sellers" and exclusive partnerships, creating roadblocks for smaller sellers. Investigations by India’s antitrust regulators have shown that Amazon and Flipkart favor a small group of large sellers on their platforms, granting them better search placement, lower fees, and other advantages. Just 35 sellers out of Amazon India’s 400,000 sellers account for two-thirds of all sales, with Amazon’s joint-venture sellers (Cloudtail and Appario) making up 35 per cent of sales alone. Ordinary merchants are “mere database entries," as described by Competition Commission of India (CCI) investigators.

This preferential treatment enables predatory pricing strategies – popular products are sold at or below cost by the favored sellers, supported by the deep pockets of the platforms. An antitrust report in 2024 found that Amazon and Flipkart had indeed violated competition laws by using preferential listings and selling goods below cost (especially mobile phones) to capture market share, which had a........

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