Andy Mukherjee, Columnist

Amazon, Alibaba and an Indian Illusion

New rules seemingly favoring e-commerce are likely to beget more rules.

March 30, 2016 at 7:53 AM UTC

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.

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The rain forest of regulations that passes as India's e-commerce policy would surely get a nod of approval from Sir Humphrey Appleby, the legendary civil servant from the British sitcom Yes Minister who believed that prudent change results from "laying stress on the essential continuity of the new proposal with existing principles, the principle of the principal arguments which the proposal proposes and propounds for their approval, in principle." Or more pithily, "government policy has nothing to do with commonsense."

And so it has been with Indian online retailing, which just got a new set of rules that seemingly allow 100 percent foreign direct investment, yet are being cheered by the country's largest home-grown brick-and-mortar store operator as a slap on the wrist for rivals like Amazon India, Flipkart and Snapdeal. Those companies essentially are foreign-owned: Flipkart investors include Tiger Global and Singapore's sovereign wealth fund, GIC; Snapdeal is backed, among others, by Jack Ma's Alibaba.