After approving the Amazon’s investment in the food retailing business, the government has now asked the e-commerce venture to keep distant its food retailing business from its existing flagship marketplace business. As in food retailing business, the government doesn’t want any foreign firm to sell their products directly to consumers apart they can act as intermediaries by lending their technology platforms to local vendors to sell goods to consumers.
While, under the food-only retail policy, companies can be wholly owned by overseas investors, but such ventures will only be allowed to sell locally produced and packaged food items.
On Monday, the government cleared Amazon’s ₹3,225 crore food retailing proposal. Now, the government wants that Amazon should maintain a separate management and offices for the food retailing venture. Amazon is still studying the approval and didn’t want to comment anything related to the matter.
In February, Amazon surprised many by filing an application with the department of industrial policy and promotion to enter food retailing sector in India. The online marketplace wants to undertake retail trading of food products to customers at any location through its offline and online channels.
The government approval allows Amazon to hold its own inventory and sell directly to consumers for the first time in India. Amazon’s food retailing subsidiary seeks to make the investment over the next five years and plans to sell third-party or its own private labels of locally produced and packaged food products.