Amazon (AMZN) Receives Permission For Food Retail In India
Zacks Investment Research | Jul 11, 2017 10:29PM ET
Amazon.com Inc. (NASDAQ:AMZN) is currently firing on all cylinders to beef up its grocery segment and outshine rivals.
Just three weeks after snapping up natural and organic foods supermarket, Whole Foods Market (NASDAQ:WFM) for $13.7 billion, the retail juggernaut received the Indian government’s nod to invest $500 million in food retail in the country.
With this India becomes the second country after the U.S. where Amazon is going the brick-and-mortar way.
Taking Advantage of the FDI Rule
Amazon is the first global player to take advantage of the Indian government’s push to channelize FDI toward improving the nation’s food supply chain. A June legislation allows 100% foreign direct investment (FDI) for companies that sell locally produced or sourced food items.
Amazon first placed the proposal in Feb 2017, which also highlighted its plans to open a wholly-owned subsidiary to conduct food retail. The proposed investment is over and above the previously committed $5 billion.
Details Few but Intentions Clear
Amazon has confirmed receiving the approval but declined to reveal business plans in details. The company is now in a position to open food outlets integrated with an online platform to sell locally produced food items.
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