Amazon India’s Pantry service, which was suspended on 1 February, when India’s new FDI in ecommerce policy kicked in, has started resuming service, reports Reuters. Pantry users had also taken to Twitter to revive Pantry, to which Amazon said that it was working on it. From the 1 Feb, Pantry users were shown a sign which read “Pantry service is temporarily unavailable. We will be back soon.”
With the new policy, a large chunk of products sold under Amazon’s own sellers like Cloudtail and Appario, and from brands like Solimo, Amazon Basics, went “currently unavailable” as the company tried to align itself with the law.
Note that last month, the Competition Commission of India approved Samara Capital and Amazon’s joint acquisition of Aditya Birla Group’s More supermarket chains. This came after the anti-trust regulator had sent a notice to Samara Capital seeking more detail on whether the joint acquisition was compliant with the government’s new FDI in e-commerce policy.
Amazon’s entry into grocery delivery
Amazon sold groceries through Amazon Pantry (debuted 2016), and Amazon Kirana Now (debuted 2015) which became Amazon NOW and now redirects to Prime Now. In May 2017, Amazon had gotten a nod from DIPP to stock and sell local grocery produce online. In the following months, it received the government’s approval to invest $500 million in the food retail segment.
In August 2018, Amazon invested Rs 100 crore in its food retail business (Amazon Retail India Pvt. Ltd), a top up to the Rs 10.5 crore it had invested in June 2018. Amazon has a total investment commitment of $5 billion (approximately Rs 32,600 crore) in India.
A short history of FDI in ecommerce
- DIPP had started a consultation process in January 2014, which revealed that industry bodies and MNCs favoured FDI in ecommerce but traders bodies opposed it.
- As an outcome of this, in March 2016, the government disallowed FDI in B2C e-commerce in India, while FDI in marketplaces was allowed to continue.
- The new policy was proposed in August 2018 and the draft that leaked to the press had several provisions to which Amazon and Flipkart had raised objections.
- (In between all of this, DIPP had considered scrapping the overall Ecommerce Policy for India altogether, and to date, its fate is unclear.)
- The FDI in Ecommerce policy came into effect from 1 February 2019, despite Amazon and Flipkart requesting that the deadline be extended by 4 and 6 months respectively.
- Along with these ecommerce companies, US government had voiced its concerns over the new regulations to Indian government officials, and pushed for the regulation to become a bilateral issue between US and India.