E-commerce website Amazon is in close talks with Future Coupons, a subsidiary of Future Group to buy its stake. This is to ensure that the e-commerce major complies with the new Foreign Direct Investment policies imposed by the Indian government in January this year.
Amazon earlier this year wanted to buy some stake in Future Retail but the new FDI policy which barres e-commerce company from investing in entities selling already on their platform. This prompted Amazon to change its strategy and thus it is now planning to buy some stake in the Future group backed-Future Coupons (a coupon provider).
“This was done primarily to raise funds from Amazon in the promoter group company, which will give it 8% stake in Future Retail through a combination of equity and debt instruments, and adhere to the government’s new rule,” said a source close to the developments.
When asked about the deal, the Amazon spokesperson said, “We do not comment on speculation about what we may or may not do in the future.”
All of this is seen as the aftermaths of the Indian government’s issued new guidelines for e-commerce market. The move has disrupted the fast growing e-commerce market as per the industry experts. The new guidelines can severely impact the business of e-commerce giants like Amazon and Flipkart, as according to new guidelines, these online retailers now can’t enter into any “exclusive deal” pact with the seller as that deal would be declared void ab initio. As per the new guidelines, the online retailers now can’t sell products from a vendor in which it has some stake, also it bars them from making any exclusive deals with the seller.