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Shopkeepers furious as Amazon's Bezos pledges $1bn for India

US giant and rival Flipkart face probe over alleged competition violations

More than 500,000 traders joined hands in 300 cities across India on Wednesday to protest Amazon's business practices.   © Reuters

MUMBAI (NewsRise) -- founder Jeff Bezos arrived in India amid a storm of protests by hundreds of thousands of small retailers across the country and an antitrust probe into alleged violations of the nation's competition laws.

Bezos arrived on Tuesday, according to his Twitter post, to attend Amazon's summit for small and midsize businesses -- Amazon SMBhav -- where he announced the company's plans to invest $1 billion to digitally enable micro, small and midsize enterprises and traders across India.

Bezos' visit comes as Amazon, along with Walmart-backed Flipkart Internet, faces the ire of small businesses, which accuse the online retailers of flouting the country's foreign investment rules by offering steep discounts that threaten the survival of small traders.

Amazon's investment will help Indian businesses grow by selling online worldwide and enabling $10 billion in cumulative exports by 2025, the company said in a statement. "Our hope is that this investment will bring millions more people into the future prosperity of India and at the same time expose the world to the Make-in-India products."

As part of his India trip, Bezos is also likely to review the online retail giant's India operations, as well as meet senior government officials, according to local media reports.

The Confederation of All India Traders, or CAIT, an industry body of over 40,000 trade associations representing 70 million traders nationwide, on Wednesday dismissed Bezos' investment commitment, saying "it's not an investment, but promotional finance to Amazon India to crush retail trade and encourage his team in India to do more predatory pricing and deep discounting."

Jeff Bezos, founder of Amazon, attends a company event in New Delhi on Wednesday.   © Reuters

In 2018, India modified foreign investment rules for the sector, which barred online companies from selling products through vendors in which they have an equity stake. It also forbade e-commerce companies from having exclusive deals with sellers to sell only on their platform. The move forced Amazon and Walmart to restructure their operations in the country.

The government now proposes to keep a tighter leash on the e-commerce companies and has outlined a draft policy that seeks to focus on data localization and improved privacy curbs.

CAIT said more than 500,000 traders joined hands in about 300 cities to protest Amazon's business practices, which they allege violated the FDI rules.

Bezos' investment commitment comes barely two days after India ordered an investigation into Amazon and Flipkart's operations following allegations that the two companies promoted "preferred sellers" on their platforms, hurting business for other smaller retailers.

The complaint filed by traders association Delhi Vyapar Mahasangh alleged that the two online retailers are promoting sellers who are affiliated with them directly or indirectly.

Amazon and Flipkart said in separate statements that they are compliant with the rules.

Amazon has expanded steadily in India, where it has already committed investments topping $5 billion since its entry in 2013. The company faces intense competition from rival Flipkart, which in 2018 was bought by Walmart in a $16 billion deal.

--Ujjwal Narayan and Dhanya Ann Thoppil

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