India: Amazon invests US$404M into India business

Amazon has started pumping money into its India business despite regulatory rules that mandate how companies can source goods for marketplaces, according to a news story.

Amazon put 29,990,000,000 rupees (US$404 million) into its India business, which follows an infusion of US$315 million half a year ago. The move illustrates the importance of India to Amazon. The company has been in the country for six years, and has so far spent upwards of US$5.5 billion. The retail giant’s main rival is Walmart-owned Flipkart.

The competition was exacerbated by new rules that prohibited both companies from selling their own inventories, so they bought in bulk and sold to resellers, and bought stakes in companies that sold products on their own platforms. In February, a new law stopped that activity, resulting in hundreds of thousands of products disappearing from the sites.

Amazon has many business ventures in India, including plane tickets, cloud services, music streaming and even phones. The marketplace in the country is crowded with competition, not only from Flipkart, but also from startups like Swiggy, Dunzo, and Grofers, among others.

Amazon also has to compete with Reliance Industries, which is India’s biggest industrial company led by the country’s wealthiest man, Mukesh Ambani. Ambani recently announced that his company was partnering with Reliance Jio to start a new eCommerce marketplace.