Amazon infuses $37.5 mn into Indian food retail subsidiary

Seattle headquartered ecommerce giant Amazon has infused $37.5 million (around Rs 284 crore) into its Indian food and grocery retail unit, Amazon Retail, in an equity share issue. 

The funding comes at the time when most ecommerce companies in India are running restricted operations due to the nationwide lockdown to curb the spread of coronavirus.

On March 19, Amazon Retail issued 28.4 crore shares at Rs 10 per share to Amazon Corporate Holdings and Amazon.com, regulatory filings by the subsidiary showed. Last year, Amazon Retail received $54 million (around Rs 412 crore) from the two holding companies, separate filings showed.

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Amazon Retail began operations in the second half of 2018 after overcoming several regulatory hurdles. To begin with, the government directed Amazon to create a separate infrastructure for its food retail operations. Second, the government barred marketplaces from selling goods through companies in which they held stakes -- however, the food retail sector was later exempted from this directive.  Indian government in 2016 permitted 100% foreign direct investment (FDI) in the food retail sector.

Amazon Retail sells about 3,000 varieties of food products and has a supplier network of 250 vendors across 100 cities. Amazon is reportedly expanding its food retail business in India by increasing its retail operations to 60 more smaller cities.

Ecommerce companies such as Amazon and Flipkart, online grocery platforms BigBasket and Grofers, and food delivery startups Zomato and Swiggy were forced to shut operations in some places on account of the lockdown, which is expected to be lifted on April 14.  

The government had said that startups providing essential goods will be allowed to function after it received complaints of law enforcement authorities shutting down warehouses and harassing delivery personnel.