DIPP to Relax Restrictions on Amazon’s Food Retailing Plans

source; google

Badal to Relax Restrictions on Amazon’s Food Retailing Plans

Food processing minister Harsimrat Kaur Badal has asked the Department of Industrial Policy and Promotion (DIPP) to relax restrictions imposed on Amazon’s food retailing plans, which have prevented the Seattle based company’s ambitious $500-million project from taking off.

Progress on Amazon’s investment proposal has been stalled by operational curbs for almost a year since it won approval.

The DIPP, a division of the commerce and industry ministry that facilitates investment and technology flows, wants Amazon to separate the warehouses, logistics and inventories for the food-only venture from those of its flagship online marketplace in India.

“Last month, I met the officials at DIPP to sort out Amazon’s food retail venture, which had met with some roadblocks,” Badal told ET in an interview on Tuesday.

Badal, the advocate, and architect of India’s food-only retailing policy, is pushing the largest investment in the sector, which other global giants have spurned. The minister said she will meet DIPP officials again in a bid to clear other “roadblocks” for Amazon.

Amazon had committed investing $5 billion in India in 2016 and a recent report said it would put in an additional $2 billion after Walmart acquired control of local online rival Flipkart.

Analysts said Badal is trying to salvage a showcase investment proposal of the 2016 policy allowing 100% foreign ownership in retail ventures that sell food products directly to consumers — both online and offline — provided they are sourced and packaged within the country. Amazon was the only global giant to apply through this route. Others including Walmart said food-only ventures by themselves didn’t make sense and the government must allow them to stock a portion of non-food items to make the business viable.

The Seattle-based retailer also wants to know if it can maintain the “segregation virtually”.

 

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