Amazon entered food retail business in India: World’s largest eCommerce firm Amazon has rolled out its own food retailing business in India starting from Pune. With this Amazon FDI in India, it has become first foreign eCommerce firm to sell food items directly to customers. It will currently operate in Pune and may take at least a quarter for Amazon to make its food retailing business spread all over the nation.
Indian government in the June 2016 had allowed 100% FDI in food retailing. The aim behind the move was to generate employments and to help producers to sell their products. Under this foreign companies were allowed to sell locally sourced food products and packaged food items directly to consumers. Then Amazon had shown interest and applied for an investment of $500 millions in February, 2017. The proposal of Amazon was then approved by government in July,2017.
As per the rules, Amazon food retail India will create separate management and offices for the venture. It will have to keep it separate its current from its marketplace business which is not allowed to sell products directly to consumers. Apart from Amazon, other foreign funded businesses like BigBasket, Grofers and Supr Daily have also got same type of approval from government for retailing of food in India.
What is 100% FDI food retail Business in India?
Hundred per cent FDI means government of India allowing foreign firms to invest full in food retail Business in India. It means now the foreign firms will not require any permission from department of industrial policy and promotion (DIPP) for investments in retail sector. Earlier foreign firms were allowed up to 49 per cent investments and for rest 51%, they had to seek permission from DIPP.