India’s government has drafted a proposal to ease foreign investment rules to allow e-commerce companies such as Amazon to buy products directly from Indian sellers and then sell them to overseas customers, a document showed.

India prohibits foreign e-commerce companies from selling goods directly to consumers at home or abroad, allowing them only to operate a marketplace to connect buyers and sellers for a fee.

The policy has been a matter of dispute between New Delhi and Washington for years, and Amazon has lobbied the Indian government to ease the rules for exports, Reuters has reported.

The proposed changes coincide with efforts by India and the US to overcome their differences over a long-delayed trade deal.

SMALL RETAILERS DISAGREE

The proposals also rebuff the demand of groups backing millions of small Indian brick-and-mortar retailers that the government should dismiss Amazon’s request on the grounds that the US company’s financial strength is a threat to their businesses.

Less than 10% of small Indian businesses selling online domestically participate in global e-commerce exports, “constrained by complex documentation, compliance requirements,” said a 10-page proposal from The Directorate General of Foreign Trade.

The policy has been a matter of dispute between New Delhi and Washington for years, and Amazon has lobbied the Indian government to ease the rules for exports.

The proposed changes coincide with efforts by India and the US to overcome their differences over a long-delayed trade deal.

Amazon said in December it helped to generate $13 billion in cumulative exports for sellers from India since 2015, and plans to increase that to $80 billion by 2030.

Last year, the Indian anti-trust watchdog’s investigation found that Amazon breached competition laws by engaging in deep discounting and working with its preferred sellers, allegations that Amazon denies.