Amazon Ups India Investment by US$3bn; Faces FAA fine

Amazon will invest another US$3 billion in India, boosting its committed investment in the country to over US$5bn and placing additional pressure on local rivals Flipkart and Snapdeal to keep raising fresh funds and keep up with competition.

Amazon warehouse in Phoenix, Arizona
Amazon warehouse in Phoenix, Arizona

At a recent summit in Washington D.C., which was attended by Indian Prime Minister Narendra Modi, Amazon chief executive Jeff Bezos was quoted as saying by Reuters that the investment is based on exponential growth in the e-commerce sector in Asia’s third largest economy.
The US-based e-commerce giant intends to capitalise on new rules for foreign direct investment in online marketplaces, which have been introduced by the Modi government and which allow 100% foreign ownership.

Putting the focus on India
Bezos said that Amazon would open a Web Services Cloud Region in India this year, and also setup its largest software engineering and development centre outside of the U.S. in the Indian city of Hyderabad.
"We have already created some 45,000 jobs and continue to see huge potential in the Indian economy," Bezos said at the annual gala of U.S. India Business Council (USIBC).
In addition to seeking new customers, Amazon is also looking to India for new inventory to sell globally. Amazon is actively involved in efforts to educate small business owners in India about selling online.

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Amazon has violated hazardous materials regulations, FAA claims
In a separate development, U.S. aviation regulators are seeking a US$350,000 fine against Amazon for allegedly sending hazardous shipments as air cargo.
Amazon, which has made two deals this year in an attempt to create its own air-shipping network, was charged earlier this month with improperly sending a caustic chemical that leaked and came in contact with nine workers at a UPS facility, the Federal Aviation Administration said in a press release.
FAA stated that from February 2013 to September 2015, “Amazon was found to have violated the hazardous materials regulations 24 other times,” adding that it is “continuing to investigate Amazon’s compliance with the hazardous materials regulations applicable to air transportation.”
In May this year, Amazon agreed to take as much as a 30% stake in Atlas Air Worldwide Holdings Inc. As part of the deal, Atlas will acquire and operate 20 Boeing Co 767-300 freighters for Amazon. In March, Amazon announced it would work with Air Transport Services Group Inc to operate another 20 Boeing 767 freighters.

Nol van Fenema

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