NEW DELHI: It was early 2019, and senior Amazon.com Inc executive Jay Carney was preparing for an important meeting. The former press secretary to U.S. President Barack Obama, Carney was scheduled to talk with India's ambassador to the United States in Washington, D.C. In Delhi, the Indian government had just announced foreign direct investment regulations that threatened to disrupt Amazon's business in the world's second most populous country.
What Carney wound up telling the ambassador is unclear. A meeting did take place in April 2019, but neither side would comment on the specifics of the gathering.The briefing note for Carney is contained in hundreds of internal Amazon documents that are reported here for the first time. News of their contents could deepen the risks facing the company as it encounters intensifying government scrutiny in one of its fastest-growing markets.
Modi's office and India's Ministry of Commerce and Industry didn't respond to questions from Reuters. Separately, Amazon is under investigation by India's Enforcement Directorate, the federal financial crime-fighting agency, which has been investigating the company for possible violation of foreign investment rules. Such probes typically take years in India, and in most cases details aren't made public.
Agarwal enjoys playing electric guitar and was a vocalist during his Stanford days in a rock band called Algo-Rhythms, according to a recent version of his profile on the alumni page of the Indian Institute of Technology, where he got a computer science degree. He is also a"die-hard fan" of comedian Jerry Seinfeld, according to the profile.
It is this barrier – the regulatory wall around the consumer – that Amazon has been trying to overcome for much of the past decade in India. Asked about the slide, Amazon said that"dawn raid preparedness" is"standard worldwide practise" and refers to the training of employees"to handle site visits from officials pertaining to police, fire services, law enforcement and other services personnel on government duty."To deal with the restrictions on direct sales, Amazon found an indirect way of reaching consumers and boosting sales quickly.
Amazon said in its statement that it facilitates"the introduction of brands to sellers" in accordance with the brands' requirements. Currently, e-commerce accounts for 4per cent of India's roughly US$900 billion retail market, according to Forrester Research. But it's growing fast. By 2016, his sales had dropped some 40per cent. Customers would come to his shop to try smartphones, ask for the WiFi password and then go online to buy the model they'd just sampled, he said. In 2018, Gada began selling at lower margins and on credit to keep sales alive. Late last year, he shut the shop he'd started in 1998. The final straw was the pandemic-induced lockdown. But he said it was the advent of online sales that killed his business.
The document also included a brief appraisal of the Indian leader."PM Modi is not an intellectual or an academic but believes that strong administration and governance is the key to running a successful government," it said."He is known to like simple, logical, straight forward thinking without excessive academic jargon."
But that month, Amazon got some bad news: The Indian government announced new foreign investment rules. It capped online marketplace sales from a single seller at 25per cent of total sales, which was seen as an attempt to level the playing field. To comply with the cap, Cloudtail's share of sales on the Amazon platform had to be brought to 25per cent or less.
Following the rule change, however, Amazon lowered the fees it charged some big sellers on its platform to enable them to offer more competitive prices."We adjusted our business model by activating a fee incentive program to provide discounted fees to a subset of large managed sellers to help them match" prices of e-commerce rivals, said the global regulatory update document.
Amazon said its marketplace fees depend on the category of product and the season of the year, and are"uniformly applicable to all like sellers."Even after India implemented new investment rules in 2016, relations between Bezos and the Modi government seemed good. That June, the Amazon boss received a business leadership award from Modi at a U.S.-India Business Council event in Washington. Bezos told the audience how small sellers were benefiting from Amazon's India marketplace.
adityakalra amazon AmitAgarwal CCI_India RBI dir_ed problems occuring since 2012 but our agencies showed casual approach so they understood anything possible in India.They can openly challenge FDI rules. No body in Govt cares about small industries other than big talks.
Business Business Latest News, Business Business Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »