Facing protests, Amazons’ Jeff Bezos offers olive branch to traders; Vows $1 billion to digitise SMEs

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Published: January 16, 2020 3:10:23 AM

Amazon currently hosts over 5 lakh domestic sellers on its India marketplace while over 60,000 local manufacturers and brands are exporting their Make in India products to customers worldwide on Amazon.

Amazons, Jeff Bezos, Make in India, CAIT, Amazon Wholesale, Amazon Pay“The 21st century is going to be the Indian century. In this 21st century, the most important alliance is going to be the alliance between India and the United States,” Bezos said. (Reuters photo)

At a time when Amazon India is facing protests by small traders for alleged discriminatory practices and the competition watchdog has initiated a probe to ascertain charges whether it indulges in deep discounting, the company’s global CEO Jeff Bezos extended an olive branch.

At a company event on Wednesday, Bezos said that the company will invest an incremental $1 billion in the country in digitising small and medium businesses and export $10 billion worth of ‘Make in India’ goods by 2025. The initiative will digitise 10 million medium and small enterprises and enable setting up digital centres in 100 cities and villages to help businesses get online to sell their goods and will offer support in marketing and logistics.

The $1 billion investment announced on Wednesday adds to $5 billion of investments in India announced by Amazon since 2014.

Amazon currently hosts over 5 lakh domestic sellers on its India marketplace while over 60,000 local manufacturers and brands are exporting their Make in India products to customers worldwide on Amazon.

“The 21st century is going to be the Indian century. In this 21st century, the most important alliance is going to be the alliance between India and the United States,” Bezos said.

Even as Bezos extended an helping hand, more than 5 lakh traders under the aegis of CAIT (Confederation of All India Traders) held protests across 300 cities on Wednesday to showcase their opposition to his visit. CAIT represents over 7 crore traders.

Amazon and Walmart-controlled Flipkart command close to 80% market share in the country’s e-commerce sector and have made large investments to consolidate their presence. Earlier this week, Amazon infused Rs 1,715 crore ($242.19 million) in fresh capital in two of its India entities, Amazon Pay and Amazon Wholesale. In October last year, Amazon Seller Services, the marketplace entity of Amazon India received Rs 3,400 crore in fresh capital from its US parent. In June, Amazon injected Rs 2,800 crore in the company. The e-commerce major infused about Rs 7,250 crore in its India marketplace in three tranches in 2018.

With protests from small traders and brick and mortar players, the government has been tightening norms for e-commerce firms having foreign direct investment. For instance, about a year back, the FDI norms were tweaked to prevent such firms from selling products of the entities in which they hold stake or whose inventory they control. It also disallowed them from asking a seller to sell any product exclusively on their platforms. Separately, the government is also in the process of devising an e-commerce policy to create a level-playing field between online and offline players.
With complaints landing at the country’s competition watchdog, Competition Commission of India, on Monday a probe was ordered against Amazon and Flipkart to ascertain charges of deep discounting, exclusive arrangements and preferential listing of sellers.

Bezos, who’s expected to meet several senior government functionaries, is likely to take up these issues. He’s also reported to have sought a meeting with Prime Minister Narendra Modi.

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