Uncertainties, risks in India business: Amazon

Amazon, the Seattle-based online retailer, has highlighted uncertainties and regulatory risks in its India business, citing the latest e-commerce guidelines which allowed 100 per cent foreign investment in marketplace platforms but with several riders. The firm has pointed at the possibility of fines and financial penalties, as well as the risk of closure, in its quarterly report filings to the US Securities & Exchange Commission. There are "substantial uncertainties’’ regarding the interpretation of laws in India and in China, it has told its shareholders.

Amazon, the Seattle-based online retailer, has highlighted uncertainties and regulatory risks in its India business, citing the latest e-commerce guidelines which allowed 100 per cent foreign investment in marketplace platforms but with several riders.

The company has pointed at the possibility of fines and financial penalties, as well as the risk of closure, in its quarterly report filings to the US Securities & Exchange Commission (SEC).

There are "substantial uncertainties’’ regarding the interpretation of laws in India and in China, it has told its shareholders. “And, it is possible that these governments will ultimately take a view contrary to ours,’’ it has said in the filings made on Wednesday.

Recently, the department of industrial policy & promotion came out with guidelines restricting price discounting on e-commerce platforms and preventing any vendor on an e-retail platform from doing more than 25 per cent of all sales.

In the case of Amazon, Cloudtail, its joint venture with Catamaran Ventures, the latter promoted by Infosys cofounder Narayana Murthy, is the most prominent vendor on the platform. Amazon has said, “For amazon.in, we provide certain marketing tools and logistics services to third-party sellers to enable them to sell online and deliver to customers.’’ Without naming Cloudtail, the company added, “we hold an indirect minority interest in an entity that is a third-party seller on the amazon.in marketplace.’’

Saying the company believes these structures and activities comply with existing laws, it added: “They involve unique risks.”