Amazon’s Food Retail Plan Hits DIPP Hurdle In India

| April 24 , 2018 , 19:34 IST

E-commerce giant Amazon had got approval from Government of India to invest in building out a full-fledged food retail business and sell food products through its wholly owned subsidiary in India in July 2017.

It has now has hit a snag with the Indian government asking the US e-commerce giant to keep separate equipment, machinery and warehouses for its food products and not to mix or share anything with its marketplace business. 

As per reports, Amazon has now sought clarification from the Department of Industrial Policy and Promotion (DIPP) whether it can share some of the warehouse staff, entry and exit doors at warehouses, barcode machines, trollies and other paraphernalia for its food-only venture with its flagship

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The company pledged to invest $500 million, or about Rs 3,320 crore, to undertake “retail trading of food products (produced or manufactured in India) to customers at any location through any channel, offline or online, including e-commerce, across India”. 

India’s e-commerce industry is expected to touch $200 Bn by 2026, as per a report by Morgan Stanley. The market reached$33 Bn registering a 19.1% growth in 2016-2017, as per Indian government’s Economic Survey 2018.

As Amazon India looks to have fallen out of Flipkart-Walmart deal, they would've wanted that their food retail venture comes off the ground at the earliest as the Walmart-Flipkart tie-up is bound to give a major challenge to the company.