Amazon starts engaging with Indian government to relax FDI norms, plans to follow a hybrid model

amazon-fdi-ecommerceWhile Indian government is still to give a clear stand on FDI in eCommerce, global retail giant Amazon, which has launched an online retail portal in India earlier this year, has said that it has started engaging with the Indian government for relaxing of foreign investment norms in eCommerce in the country.

Amit Deshpande, who is the Director and General Manager at Amazon, has said that the FDI in online retail is not only good for retailers but also for consumers as this would provide them with more choices and will also improve the level of customer service in the country.

“India is huge opportunity for us. We are here for long term. We believe Indian eCommerce space has got potential,” said Amit Deshpande.

Amazon had launched operations in India in June this year and currently it is following a marketplace model. The company says that once the Indian government relaxes FDI norms, it will start following a hybrid model apart from marketplace model in India.

In a marketplace model online retailers don’t sell goods directly, rather they provide sellers with a platform to sell their product, whereas, when Amazon will adopt a Hybrid model  alongwith the marketplace model – it will start retailing for products as well.

Even Reebok, producer of athletic shoes, clothing, and accessories which also has plans to launch an online retail store in the country, is trying to understand how this would work, and is also hopeful that the government may relook and include eCommerce in the rest of the FDI reforms.

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Previously, Amazon had also sent its top brass to India to recommend a policy change in FDI in online retail in the country.

There is already up-to 100% FDI in B2B eCommerce since 2006 in the country, while it is restricted to multi-brand retailing. The present FDI norms, announced in September last year for retail sector, have blocked foreign investments in eCommerce and allowed up to 51% FDI in multi-brand retail stores and 100% FDI in single-brand retail.

Amazon had gone online in July 1995, and it had made its Indian foray in in 2012 via Junglee.com which provides customers with tools to find products and compare prices.

To contact author of this post, email pooja.sareen@wirefootindia.com

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