After a temporary hiccup, grocery business back on Amazon India

Amazon sells grocery through Amazon Pantry and Prime Now. After new FDI norms came into force on Feb 1, Pantry users took to twitter seeking a clarification about its service.

After a temporary disruption following the implementation of revised ecommerce FDI rules, Amazon India’s food retail licence holding entity, Amazon Retail, is back selling grocery and food items on the marketplace.

The development comes after the government clarified on Thursday that Amazon India food retailing licence rights remains unaffected by the December FDI clarification of Press Note 2, media reports said. The ecommerce major's spokesperson said, “ARIPL, with the specific approval for food retail, remains compliant to all relevant laws.”

The grocery service became unavailable in India on February 1, 2019, the day when the new norms for FDI in ecommerce came into force. The company also reportedly removed its affiliated sellers like Cloudtail India and Appario Retail Private Ltd from the marketplace. The ecommerce major owns equity stakes in these two entities.

Responding to Indian users on questions of grocery supply, the ecommerce major tweeted, "Currently, pantry items are not available on Amazon. Kindly stay tuned for more updates. Thank you for understanding.”

Both ecommerce majors, Amazon India and Walmart-owned Flipkart, had unsuccessfully sought an extension of the February 1 deadline to be able to comply with the Press Note 2, which the government notified in December 2018.

The newly-enforced rules bar marketplaces or its entities from owning inventory. Media reports said that the rules forced the Jeff Bezos-owned company to remove hundreds of thousands of products from its website.

India allowed the company to retail food products in the country in 2017, and it committed to invest $500 million for the same business.

Also read: Amazon India launches Seller Lending Network

The government’s rules regarding food retailers that have foreign investments enjoin such companies to keep accounts and invoices separate from those of their other businesses. However, such retailers can use the warehousing facility meant for other businesses to store food products as long as such food items are kept physically separated and readily distinguishable from inventory of any other business of the investee company.