Amazon plans to start cloud services in India

US online marketplace Amazon plans to start cloud services in India and shift some of its servers from Singapore for its data centres in India. Sources said these issues, among others, were discussed at a meeting between senior Amazon officials and Union Communications and Information Technology Minister Ravi Shankar Prasad on Thursday.

A three-member delegation from Amazon, comprising of Amit Aggarwal, vice-president and managing director of Amazon India; Monique Meche, vice-president (public policy); and Lisam Mishra, director (public policy), participated in the meeting, which lasted about 30 minutes. The Amazon officials also discussed the company's expansion plans, as well as a few regulatory and taxation issues it faced in the country.

"Amazon officials talked about bringing their cloud facility to India. The ministry has given a positive response to Amazon and told them Amazon could work according to the government's cloud policy," said a senior ministry official. He added the company wanted to transfer some of its servers from Singapore for the data centres it planned to come up by next year.

Sources said Amazon was looking for clarity on a goods and services tax (GST), adding the company's officials also discussed the taxation problems it faced in Karnataka. "Basically on the GST issue, they raised questions on the fact that a lot of states have different perspectives. The minister said the government is trying to bring in GST and a lot of concerns of e-commerce players would be addressed," the official added.

"With respect to Karnataka, we have always maintained the situation is one in which the laws have not kept pace with new-age online business models that enable a faster, convenient and nationwide access to customers for sellers, especially small and medium businesses, at significantly low costs. We continue to work with the state government and are optimistic about a resolution," an Amazon spokesperson had said.

Recently, e-commerce giants such as Amazon and Flipkart have faced a number of taxation woes in Karnataka. Amazon ran into trouble with the state's commercial taxes department, following which the state cancelled the licences of many smaller merchants registered on Amazon.

Sources said Amazon officials also raised with the minister a few clearances issues the company was facing with the Bureau of Indian Standards.

"They talked about their hyper-local plans; they are involving a lot of small-time grocers, which is helping them gain massive footprint and expand in India. They also told the minister about 60 per cent of their customer base was from rural India," said the official quoted earlier.