E-commerce giant Amazon has announced its plans to begin manufacturing devices in India.
This is the first Amazon manufacturing line in India and reiterates the firm’s commitment to the government’s “Make in India” for an Aatmanirbhar Bharat. Amazon will commence manufacturing with contract manufacturer Cloud Network Technology, a subsidiary of Foxconn, in Chennai, and start production later this year.
The programme will churn out hundreds of thousands of Fire TV Stick devices every year. Amazon will evaluate scaling capacity to additional marketplaces and cities, depending on the domestic demand.
“Amazon is committed to partner the government to advance the vision of an Aatmanirbhar Bharat,” said Amit Agarwal, global senior vice-president and country leader for Amazon India. “We have pledged to invest $1 billion to digitise 10 million small and medium businesses and help Indian businesses sell worldwide, thereby enabling $10 billion in cumulative exports and creating an additional 1 million jobs by 2025.”
Agarwal on Tuesday briefed Ravi Shankar Prasad, Union minister for communications, electronics & information technology, and law & justice, on the details of the initiative. Prasad said in a series of tweets that India was an attractive investment destination and was poised to become a major player in the global supply chain in the electronics and IT products industry. He said the government’s decision to launch a production-linked incentive (PLI) scheme had received a tremendous response globally. “We welcome Amazon’s decision to set up a manufacturing line in Chennai, as it will enhance domestic production capacities, and create jobs as well,” said Prasad.
“This will further our mission of creating an Aatmanirbhar Bharat which is digitally empowered.”
Prasad has asked Amazon to help in taking products made by India’s artisans and ayurvedic products to global markets through e-commerce.
In addition, he suggested the e-commerce giant develop a few villages in India and develop them as fully digital ones as part of the IT ministry’s digital village programme. “Amazon should work with small local shops and make them a stakeholder,” he added.
In 2020 Amazon announced “Local Shops on Amazon”, a programme that retailers and local shops be self-dependent, and benefit from selling online.
It now has over 22,000 neighbourhood stores registered across the country, gathering additional footfalls through their online presence and furthering their earning potential by acting as pickup points, logistics partners, and experience centres for e-commerce.
Amazon and its rival Flipkart have faced court cases related to probe by the Competition Commission of India (CCI) for alleged anti-competitive practices. The companies deny the allegations. These kinds of courtroom battles have been backed by trade bodies — the Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) — and are expected to have a bearing on the upcoming e-commerce policy, according to people familiar with the matter. It has also been reported that India is planning to tighten foreign investment rules, which might affect e-commerce companies, including Amazon and Walmart. It was reported in January that the Enforcement Directorate (ED) has initiated a probe against e-commerce giant Amazon for alleged violation of the foreign exchange law and rules of the country.
It was reported that the ED had registered a case against Amazon for allegedly violating provisions of the foreign exchange law linked to multi-brand retail. Amazon is also locked in a legal battle with Kishore Biyani-headed Future Group for the retail conglomerate’s $3.4 billion deal with Mukesh Ambani-owned Reliance Industries.