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Amazon continues to lobby for FDI in e-commerce

Amazon LogoAmazon lobbied US government agencies for the second quarter in a row, on issues related to foreign direct investment in India, international data flows and free trade agreements, according to a lobbying disclosure for the quarter filed by the company. It approached US Senate, House of representatives, US Trade Representative (USTR), Department of Commerce and the Department of State with these issues.
The company spent $830,000 on lobbying this quarter on issues such as net neutrality, patent laws, taxation, cloud security, online wine sales, big data, unmanned aerial vehicles and mobile payments, apart from FDI laws in India. The company had spent $960,000 lobbying for similar issues in the previous quarter.

Amazon has been expanding its offerings in India aggressively, but it remains a marketplace and the only item it seems to sell directly are Kindle e-book readers. It competes against companies like Flipkart, Snapdeal and eBay apart from vertical focused companies like Myntra and Jabong.

Getting 100% FDI in e-commerce here will be an uphill battle for Amazon, because all political parties seems to be against such investments, going by their election manifestos. However it is worth noting that commerce and industry minister Anand Sharma had said just ahead of the elections that he is in favor of allowing 100% FDI in the e-commerce sector.

Earlier in January, Department of Industrial Policy and Promotion (DIPP) had also floated a discussion paper on e-commerce in India, mentioning that several MNCs, industry bodies and an international council have made a case for allowing FDI in B2C e-commerce while a national body of traders had strongly opposed this move. In its submission, E-commerce venture Yebhi had sought 100% FDI in e-commerce of all goods, except for food (ReadMedianama’s submission on FDI in E-commerce sent to the central government).

Lobbying in India: In India, Amazon has been continuously engaging with the Indian government to relax the regulations against foreign e-commerce companies and allow foreign direct investment in online retail. Amazon’s global vice president Paul Misener had met with Anand Sharma in February 2013 and again in July 2013 to discuss this issue.

In November 2013, a PTI report quoted Amazon director and general manager (seller services) Amit Deshpande saying that they are engaging with the government to relax FDI norms in e-commerce space, following which it can adopt a US-like hybrid model wherein Amazon will start retailing products along with the existing marketplace. Note that Amazon marketplace accounts for around 40% of their business in the US.

Following a long ambiguity in the Indian Government’s stance on FDI in e-commerce, the Department of Industrial Policy and Promotion (DIPP) had floated a discussion paper on e-commerce in India, in which it had mentioned that several MNCs, industry bodies and an international council have made a case for allowing FDI in B2C e-commerce while a national body of traders had strongly opposed this move.

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