Online sales in India could drop $46 billion by 2022 as a result of its new foreign investment policies for its e-commerce division, which houses US tech giants like Inc. and Walmart Inc.-owned Flipkart Pvt. Ltd.

Data provided by a global consultant firm showed that the gross-merchandise value (GMV) of products sold online could fall $800 million from expectations in the current fiscal year that ends in March. The sales would then shrink significantly below earlier forecasts, cutting $45.2 billion in the next three years.

Sales are still expected to rise, although at a less robust rate than anticipated before the policy change.  

Online retailers regularly use GMV based on monthly online sales to gauge performance, as they usually generate revenue from the commissions they obtain from sellers.  

Should the companies choose to modify their business structures to meet the new rule, the move could negatively impact their online retail sales growth, tax collections, and job creation.

The analysis showed that by March 2022, the Indian rule might result in the creation of 1.1 million jobs, fewer than what may have been previously expected, and lead to a reduction in taxes collected of $6 billion.            

The draft analysis has not been released to the public, with the consultant group saying it does not endorse any of these assumptions or conclusions, nor have they conducted any independent study on this, adding that it does not comment on company specific issues as a matter of policy.

Following the news, an apex body of trading community of India stated that it disagree with the analysis, and that it would fight tooth and nail if the government made any changes to the e-commerce rule under pressure from US corporations.