By Adam Clark

Amazon.com and Walmart are generally set to be hurt by President Donald Trump's tariffs. However, there could be a silver lining. The administration is negotiating with India to allow U.S. companies to gain broader access to its huge e-commerce market.

Amazon and Walmart already do big business in India. Walmart's takeover of India's Flipkart for $16 billion in 2018 was its biggest acquisition ever and Amazon has invested billions of dollars in the country.

However, India's rules forbid non-Indian online sellers from holding their own inventory and shipping it out to consumers. Instead, Amazon and Walmart's Flipkart largely act as marketplaces for third-party sellers in India.

The Trump administration seems to want to change that. Removing barriers for American e-commerce companies is one of the topics under negotiation as the U.S. and Indian governments look to strike a deal to remove threatened tariffs, according to the Financial Times on Tuesday, which cited industry executives and government officials.

The U.S. and India on Monday announced they had agreed to broad terms of negotiation for a potential bilateral trade deal, following Vice President JD Vance's meeting with Indian Prime Minister Narendra Modi.

"There is a serious lack of reciprocity in the trade relationship with India. These ongoing talks will help achieve balance and reciprocity by opening new markets for American goods and addressing unfair practices that harm American workers," said U.S. Trade Representative Jamieson Greer in a statement on Monday.

The Indian online retail market comprised around $60 billion in gross merchandise value in 2024, with the world's second-largest online shopper base, according to consultancy firm Bain & Co.

Amazon shares were up 0.7% at $168.51 in premarket trading on Tuesday but have fallen 24% this year so far through to Monday's close as the market digest the potential hit to the retail and cloud-computing company from an escalating trade war.

Amazon shares were downgraded by Raymond James on Monday, citing the potential hit to its retail and advertising businesses from tariffs on China.

Walmart has held up better, rising just over 2% in 2025 so far as analysts back the retailer to be a good defensive stock even in the face of recession risks. The stock was up 0.5% in premarket trading on Tuesday.

Write to Adam Clark at adam.clark@barrons.com

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April 22, 2025 09:04 ET (13:04 GMT)

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