Amazon CEO Jeff Bezos has lobbied Prime Minister Narendra Modi to allow foreign investment-backed e-commerce companies such as the one he runs to operate hybrid models in India that are part marketplace and part inventory-led, said a person with knowledge of this.
Such a move, if accepted, would amount to a dramatic relaxation of the rules announced recently for online retailers with overseas investment. Under the March guidelines, e-commerce companies with foreign direct investment (FDI) can only function as marketplaces.
These are platforms that connect third-party vendors to buyers. But the e-commerce players can’t sell directly to consumers. Bezos is said to have sought the change during a meeting he had with Modi in Washington DC during the Indian Prime Minister’s trip to the US last week. This came after Amazon announced an additional $3 billion investment in India, the fastest-growing market for the Seattle-based online titan.
Spokespersons for the government and the Prime Minister’s Office didn’t respond to queries sent on Thursday and neither did Amazon. A senior government official had told ET earlier that the government should take advantage of its large mandate and open up FDI in online retail besides doing away with mandatory 30% local sourcing.
