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In recent years, foreign companies have largely dominated India's emerging Internet economy. In response, India announced plans in January 2019 to introduce a national champion policy that would tighten restrictions on foreign firms, giving domestic start-ups an advantage in the marketplace. A similar plan has worked for domestic Internet retailers in neighboring China, where Alibaba Group Holding Ltd. and Tencent Holdings Ltd. compete without much interference from U.S. and European companies. Two large global retailers, Amazon, and Walmart, which purchased formerly Indian-owned Flikpart, now compete with the Indian conglomerate, Reliance Group. Reliance Group launched India's largest retailer, Reliance Retail, in 2020. While Amazon and Walmart are not permitted to sell their own products or own inventory and have restrictions on ownership of large sellers, Reliance Retail does not face such restrictions. Amazon attempted a legal battle but failed to block the recent acquisition of its former partner and second-largest Indian retailer, Future Group, by Reliance Industries. Amazon and Walmart are attempting to forge ahead with their own local partnerships while Reliance Retail's online grocery store Jio-Mart has gained popularity during the pandemic. The Indian government, meanwhile, is drafting new e- commerce rules to target digital monopolies and plug loopholes that Amazon and Walmart may have benefited from. 137, 138

In recent years, foreign companies have largely dominated India's emerging Internet economy. In response, India announced plans in January 2019 to introduce a national champion policy that would tighten restrictions on foreign firms, giving domestic start-ups an advantage in the marketplace. A similar plan has worked for domestic Internet retailers in neighboring China, where Alibaba Group Holding Ltd. and Tencent Holdings Ltd. compete without much interference from U.S. and European companies. Two large global retailers, Amazon, and Walmart, which purchased formerly Indian-owned Flikpart, now compete with the Indian conglomerate, Reliance Group. Reliance Group launched India's largest retailer, Reliance Retail, in 2020. While Amazon and Walmart are not permitted to sell their own products or own inventory and have restrictions on ownership of large sellers, Reliance Retail does not face such restrictions. Amazon attempted a legal battle but failed to block the recent acquisition of its former partner and second-largest Indian retailer, Future Group, by Reliance Industries. Amazon and Walmart are attempting to forge ahead with their own local partnerships while Reliance Retail's online grocery store Jio-Mart has gained popularity during the pandemic. The Indian government, meanwhile, is drafting new e- commerce rules to target digital monopolies and plug loopholes that Amazon and Walmart may have benefited from. 137, 138

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter15: Contracting, Governance, And Organizational Form
Section: Chapter Questions
Problem 1.3CE
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Based on the text, what is wrong with India's position of promoting domestic firms at the risk of less foreign investment?

In recent years, foreign companies have largely dominated India's emerging Internet economy. In response, India announced plans in January 2019 to introduce a national champion policy that would tighten restrictions on foreign firms, giving domestic start-ups an advantage in the marketplace. A similar plan has worked for domestic Internet retailers in neighboring China, where Alibaba Group Holding Ltd. and Tencent Holdings Ltd. compete without much interference from U.S. and European companies. Two large global retailers, Amazon, and Walmart, which purchased formerly Indian-owned Flikpart, now compete with the Indian conglomerate, Reliance Group. Reliance Group launched India's largest retailer, Reliance Retail, in 2020. While Amazon and Walmart are not permitted to sell their own products or own inventory and have restrictions on ownership of large sellers, Reliance Retail does not face such restrictions. Amazon attempted a legal battle but failed to block the recent acquisition of its former partner and second-largest Indian retailer, Future Group, by Reliance Industries. Amazon and Walmart are attempting to forge ahead with their own local partnerships while Reliance Retail's online grocery store Jio-Mart has gained popularity during the pandemic. The Indian government, meanwhile, is drafting new e- commerce rules to target digital monopolies and plug loopholes that Amazon and Walmart may have benefited from. 137, 138
Transcribed Image Text:In recent years, foreign companies have largely dominated India's emerging Internet economy. In response, India announced plans in January 2019 to introduce a national champion policy that would tighten restrictions on foreign firms, giving domestic start-ups an advantage in the marketplace. A similar plan has worked for domestic Internet retailers in neighboring China, where Alibaba Group Holding Ltd. and Tencent Holdings Ltd. compete without much interference from U.S. and European companies. Two large global retailers, Amazon, and Walmart, which purchased formerly Indian-owned Flikpart, now compete with the Indian conglomerate, Reliance Group. Reliance Group launched India's largest retailer, Reliance Retail, in 2020. While Amazon and Walmart are not permitted to sell their own products or own inventory and have restrictions on ownership of large sellers, Reliance Retail does not face such restrictions. Amazon attempted a legal battle but failed to block the recent acquisition of its former partner and second-largest Indian retailer, Future Group, by Reliance Industries. Amazon and Walmart are attempting to forge ahead with their own local partnerships while Reliance Retail's online grocery store Jio-Mart has gained popularity during the pandemic. The Indian government, meanwhile, is drafting new e- commerce rules to target digital monopolies and plug loopholes that Amazon and Walmart may have benefited from. 137, 138
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