Amazon’s food retail plans in India hit a snag since it first made the investment proposal in February 2017. Fast forward to June 2018, Amazon is still brainstorming to bring clarity on the restrictions imposed by DIPP to take off its $500 Mn project in the country. However, now Food Processing Minister Harsimrat Kaur Badal has given hope to the US-based etailer.
The Minister, as per an ET report, has asked the Department of Industrial Policy and Promotion (DIPP) to relax restrictions imposed on Amazon’s food retailing plans.
After the US-based etailer received a nod from the Indian government for its food retail venture in July 2017, DIPP had asked the company to keep separate equipment, machinery and warehouses for its food products and not to mix or share anything with its marketplace business.
Following this, in April 2018 Amazon has sought clarification from DIPP to understand if it can share some of the warehouse staff, entry and exit doors at warehouses, barcode machines, trolleys and other paraphernalia for its food-only venture with Amazon.in. Also, it has sought to understand if it can maintain the “segregation virtually”.
While the response from DIPP is awaited so far, these confusions have delayed the complete rollout of etailer’s food retail in India by months.
“Last month, I met the officials at DIPP to sort out Amazon’s food retail venture, which had met with some roadblocks. First, DIPP was not allowing them to have it (food retail and marketplace products) in the same space. Then they told them to maintain separate inventories,” Minister said.
The minister further added that while DIPP has agreed to relax the requirement of maintaining separate warehouses, the department is yet to allow Amazon to use the same transportation and logistics resources for distribution in both ventures.
Amazon has started its pilot project in Pune in February 2018. It is now selling locally made and packaged food to consumers directly. Most recently, Amazon invested $1.5 Mn (INR 10.5 Cr) in Amazon Retail India. However, despite moving steadily so far, the clouds are still hovering over its Pan India roll out.