Amazon to invest another $3 bn in India, takes total to $5 bn

08 Jun 2016

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Amazon founder and chief executive Jeff Bezos said on Tuesday that the American online retail giant would invest an additional $3 billion in India, boosting the company's committed investment in the country to $5 billion.

Amazon's investment decision is seen as a vote of confidence for Indian Prime Minister Narendra Modi who presented the US India Business Council's global leadership awards to Bezos and Sun Pharmaceuticals founder Dilip Shanghvi in Washington.

''This award is a recognition of the fact that we have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy,'' Bezos told the USIBC summit in Washington headlined by Modi, who also met on Tuesday with President Barack Obama.

''Our Amazon.in team is surpassing even our most ambitious planned milestones, and I'm pleased to announce today that we'll invest an additional US $3 billion on top of the $2 billion that we announced in 2014, bringing our total investment in India to over US $5 billion,'' he added.

As Amazon stumbles in China, unable to take market share away from Alibaba's home-grown Chinese sites like Taobao and Tmall, India rises as its biggest overseas opportunity. For more than a decade, Amazon has tried with little success to become a big ecommerce player in the world's most populous country, China. Now it's becoming clear that Amazon has its eyes on India.

That's probably part of the reason Amazon is going to pour $3 billion into its Indian online store which is growing at a tearing pace after being launched in 2013.

A survey in March revealed that consumers in India trust Amazon's brand more than any other web retailer - Amazon competes with Indian ecommerce companies like Flipkart and Snapdeal.

Bezos said Amazon would open a Web Services Cloud Region in India this year and the country would soon become home to the firm's largest software engineering and development centre outside of the US.

''We have barely scratched the surface of this vast country,'' said Bezos. ''Soon India will be home to our largest software engineering development center outside the United States,'' he said referring to Amazon's planned facility in Hyderabad.

Apple is also setting up its first technology development centre outside the US and has chosen India's IT hub Hyderabad for the same.

Meanwhile, Google's Sundar Pichai has said the company plans to open South Asia's biggest campus and its only facility outside the US in Hyderabad in the next few years.

Apple, Amazon, Google, and Uber have queued up to have their second-largest development centres, outside the US, in Hyderabad all within a radius of 10 kilometers.

Amazon's India business is being run by Amit Agarwal, one of only a handful of Amazon employees who have worked as Jeff Bezos's ''shadows''.

''These shadows, or ''technical advisors,'' work side by side with Bezos and often end up in some of the most critical roles at Amazon after their Bezos master class is over. Agarwal held this role from 2007 to 2009,'' noted ReCode.

The king of ecommerce also talked about how he had a ''soft corner'' for small entrepreneurs as he was one too, not very long ago.For nearly a year, Bezos and a crew of five employees worked out of his garage setting up Amazon.com. Bezos is now the world's fourth-richest man.

In keeping with his blueprint to help small entrepreneurs in India, Bezos said Amazon is expanding its Fulfilment by Amazon service, which provides storage, parking and shipping for independent merchants selling products on Amazon's website.

Bezos said Amazon had so far built 21 fulfilment centres with more than 5 million cubic feet of storage space.

Bezos said Amazon's link-up with India Post had helped it to reach all serviceable postal codes in the country.

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