Why would anyone invest with so much uncertainty?

Last month the Indian government announced a new set of rules governing e-commerce companies operating in the country. E-commerce in India is virtually controlled by two US companies, Amazon which has invested $5.5 billion in its business, and Walmart which bought Flipkart for $16 billion last year. The government collected Rs 74.39 billion in taxes from Walmart and another Rs 6.99 billion from one of the promoters of Flipkart, Sachin Bansal. The deal between Walmart and Flipkart was confirmed in May of last year. Would Walmart have paid such an eye-watering sum of money and huge taxes if it knew that the government will move goalposts in 6 months time? It is widely accepted that the new rules are designed to please small shopkeepers who feel that these large foreign companies, with deep pockets, are taking away their business through predatory pricing. Industrialist M Pai feels that it is not wrong to restrict predatory pricing because the Indian retail sector should not become a monopoly of foreign firms, but the way it was done is wrong. However, the government does not see anything wrong in Reliance Jio selling cheap data packs with free voice calls which has slashed earnings of existing companies. "Before exceptional items Airtel posted a Rs 1,041 crore consolidated loss for the just ended quarter." It also lost 49 million customers, 14.6%. Telecom companies are having to sell their towers to foreign companies to reduce losses. "Wall Street biggie, Morgan Stanley said Walmart may exit Flipkart in a similar move to what Amazon did in China if the retail giant can't see a long-term path to profitability." "Despite the recent changes in regulations, we remain optimistic about the country," said Dirk Van den Berghe, CEO Walmart Asia and Canada. He maybe hoping that a new government elected in May will dilute some of the rules. "The tighter rules, aimed at protecting small traders, may end up benefiting the country's richest man, Mukesh Ambani, who is building a home-grown competitor," wrote PR Sanjai and S Rai. Ambani owns Jio. "Ambani wants his consumer offerings -- covering telecom, fiber-to-home broadband, media and entertainment and retail -- to contribute nearly as much to the conglomerate's overall earnings as its bread-and-butter energy and petrochemical businesses." "The Indian government is forcing Amazon CEO Jeff Bezos to compete with one hand tied behind his back," wrote A Mukherjee. The government is to ignore foreign arbitration on its arbitrary tax demands, wrote AP Datar. India should warn the world -- Invest at your peril.