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Jeff Bezos announces investment of over USD 1 billion to digitize Indian sellers (Updated)

Bezos said 21st century is going to be the Indian century.

Source: Unsplash

While Amazon founder and CEO Jeff Bezos Wednesday announced over USD 1 billion investment—a gift for small and medium businesses of India—during his recent three-day trip in the country, it seemed that Indian physical retailers were unimpressed by this as they continued with their protest and sloganeering of “Amazon Go Back.”

As part of the trip, Bezos interacted with Amazon India country head Amit Agarwal during an event in New Delhi. He said the investment will go towards digitizing Indian small and medium businesses.

Amazon India, Bezos said, will leverage the global footprints of the parent company to export ‘Make in India’ products worth USD 10 billion by 2025—a process that has already started. “We are announcing it now, but it is already working. When something works, you should double-down on it.”

Additionally, according to Amazon India’s regulatory filings with the ministry of corporate affairs Amazon has invested INR 1700 crore (USD 240 million) into its payment and wholesale business in India.

The U.S. e-tailer competes with Walmart-owned Flipkart in India and the pledge of over USD 1 billion will go towards warding off the rising competition. A part of the investment will be used to expand the reach of its existing “Digital Haats” in 100 cities, villages, and communities. Haat is a makeshift market the comes and goes in Indian hinterlands and small towns. The funding will be used to provide services such as e-commerce on-boarding, cataloging, and warehouse space for small businesses.

CAIT members protesting against the alleged anti-competitive practices of Amazon ahead of the visit of Jeff Bezos in New Delhi. (Picture: CAIT)

Indian commerce minister Piyush Goyal Thursday said the USD 1 billion pledge is in no way favor to India. “They may have put in a billion dollars but then if they make a loss of a billion dollars every year, then they jolly well have to finance that billion dollars,” Goyal told local reporters during an event.

In its bid to install more resources for small and medium businesses, it will also increase the capacity of its “Amazon Easy Programme” to help neighborhood stores set up digital kiosks for their users to learn place an online order from Amazon.

During his interaction with Agarwal, Bezos indulged in a few feel-good one-liners to woo the audience and Indian regulators. “I want to make a prediction for you: the 21st century is going to be the Indian century,” he said inviting claps and hooting from around 3000 small and medium businesses sitting in the audience. He went on to give one more prediction: “In this 21st century the most important alliance is going to be the alliance between the US and India, the world’s oldest democracy and the world’s largest democracy.”

In contrast, on the same day, the Confederation of All India Traders (CAIT), an industry body of over 70 million businesses held several protest rallies in the city ahead of Bezos’ visit. His visit also came at a time when India’s anti-trust body Competition Commission of India on Tuesday gave a green signal to investigate the business practices of Flipkart and Amazon for any violation of competition laws. Physical retailers claim both the online retailers are flouting India’s foreign direct investment (FDI) rules as they continue to sell products on discounts and forge an exclusive partnership with sellers.

This report was updated on January 17 to include recent developments.