Amazon promises $20 Bn in Indian exports by 2025

Amazon committed to facilitating exports of Indian goods worth $20 billion in the coming three years. The announcement came in its 2022 Exports Digest. Averaged out, that translates to around $2 billion a year in exports since 2015, when the company first started working with medium, small and micro enterprises (MSMEs) and other firms to have Indian goods shipped to Amazon customers in other countries.

But the company only crossed $2 billion in cumulative exports (and not yearly exports) in 2020, which means that until that year it was facilitating an average of $400 million in yearly exports, and will now have to clock over $5 billion a year to hit this goal.

“Exporters on the [Amazon Global Selling] program are on track to surpass the $5 billion milestone in cumulative exports. Importantly, the program took 3 years to enable the first billion dollars in exports, while the last 2 billion have come in just 17 months,” Amazon’s top executive for India, Amit Agrawal, said in the Exports Digest.

The top-growing product categories for Indian exporters are apparel, toys, jewelry, and books. Over a thousand retailers clocked over Rs 1 crore in sales to the 17 other international markets where Amazon operates, the company said.

The announcement of the new cumulative export goal, which was made alongside an endorsement from a Union Minister, comes as Amazon faces tensions and legal setbacks in India that might threaten its growth in India. The company is locked in a legal battle with Reliance Industries Limited over control for the Future Group’s retail assets, which the e-commerce giant argues it had the right to veto.

Two of the platform’s main retailers, Cloudtail and Appario, were raided by the Competition Commission of India, which is looking into whether those firms are being given an unfair advantage on Amazon.

With this announcement, though, Amazon is likely seeking to gain some level of political and economic leverage — the company has had fraught relations with brick-and-mortar traders, a group that has accused it of predatory pricing and skirting legal norms. “Amazon is flouting all laws and FDI policy of the Government and trying to creating a monopolistic market in India since a long time and there is no transparency on [the company’s] e-commerce portal thereby causing huge damage to small retailers of the country,” Praveen Khandelwal, the Secretary General of the Confederation of All India Traders said in a statement last Thursday.

Spotlighting ties with MSMEs has long been a tool in Amazon’s arsenal to counter this rhetoric, as a way of arguing that it’s actually helping the very groups whose representatives accuse it of threatening their existence. The company has in the past advertised its smaller sellers in its marketing, even though Reuters reporting revealed that Cloudtail accounted for 40% of sales on the platform.

In doing so, it has also followed a well worn path by large foreign retailers, notably Swedish furniture giant Ikea, which has promised to increase local sourcing as well as take made in India to markets worldwide.