Can Amazon’s ‘Atmanirbhar’ Route Bring it Closer to the Government
Amazon will soon begin manufacturing Amazon Devices, including Fire TV sticks, in Chennai later this year in partnership with Foxconn's subsidiary.
In recent years, taking the ‘Make in India’ and the ‘Self-reliant’ or ‘Atmanirbhar’ route is the obvious way for businesses to be in the good books of the government, and online retail giant Amazon has understood this, albeit a little late. Amazon’s has said in its official blog post that it will begin manufacturing Amazon Devices, including Fire TV sticks, in Chennai later this year in partnership with Foxconn’s subsidiary.
With this move, the online retailer not only joins tech giants such as Apple and Samsung Electronics in making devices like phones and tablets in the South Asian nation, but also seems to bury the hatchet with the India government.
Let’s admit… Amazon has grown very quickly in India, but the retail giant always had an ‘India problem’. Or maybe it’s the other way round. Besides facing regulatory challenges in the country and battling local rivals for a bigger share of the promising Indian market, the retail giant faced the wrath of the government from time to time.
Read more: Jeff Bezos’ India Visit: The Good News and Controversies
However, Amazon’s setting up manufacturing in India “reiterates its commitment to the government’s ‘Make in India’ and ‘Aatmanirbhar Bharat’ initiatives,” the company said.
The announcement was made following a meeting between Amazon India’s chief Amit Agarwal and Union Minister of Information and Technology Ravi Shankar Prasad, who welcomed Amazon’s decision as it “will enhance domestic production capacities, and create jobs.
“India is an attractive investment destination and is poised to become a major player in the global supply chain in the electronics and IT products industry,” the minister said.
A tweet from Amazon added that Tamil Nadu has been an essential partner for the company and that its first manufacturing line in India in Chennai will contribute directly to the local economy and showcase India’s ability to produce world-class products.
Amazon said it will begin with producing “hundreds of thousands” of Amazon Fire TV Stick devices every year. It also wants to evaluate the scaling capacity of the manufacturing line to additional marketplaces and more cities depending on the domestic demand.
Amazon had earlier said that it will invest $1 billion to digitize 10 million small and medium businesses, help businesses in India sell worldwide enabling $10 billion in cumulative exports, and create 1 million jobs by 2025.
In 2020 Amazon announced “Local Shops on Amazon”, a program that retailers and local shops be self-dependent, and benefit from selling online. It now has over 22,000 neighborhood 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.
However, its ecommerce business in India is in doldrums, Amazon and its rival Flipkart have faced court cases related to probe by the Competition Commission of India (CCI) for alleged anti-competitive practices. 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. 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.
While we leave those stories for another day, it seems now that Amazon is treading even more carefully in the Indian terrain. It has come a long way from the time (circa 2917) when it was criticized for selling a doormat in India featuring the country’s flag. As Gartner retail executive Miriam Burt remarked that the e-commerce giant needs to expand its knowledge of the Indian people and culture for long-term success.
Amazon must have learned the lessons… and is chalking more plans to win over the India market, in every possible way. The proof of the pudding is in its recent commitment to ‘Make in India’, that we believe will contribute directly to the local economy, creating jobs and boosting Indian innovation.