Amazon’s Jeff Bezos has suggested PM Modi to tweak FDI norms for more business

When Amazon CEO Jeff Bezos met Indian Prime Minister Narendra Modi in Washington DC, he lobbied the PM for hybrid models in the country.

Bezos suggested Modi for having part marketplace and part inventory-led models in India.

Under the inventory model, the business involves sourcing goods, holding stocks and selling merchandise directly to the consumer.

If the PM gives a go ahead, this will demand huge relaxation of newly formed rules. Under the guidelines, e-commerce companies with foreign direct investment (FDI) can only function as marketplaces.

READ ALSO: Amazon is pumping $5 billion in India, says this is just the beginning

Presently, the online marketplaces connect buyers with the vendors as they cannot directly sell to the consumers.

Bezos, reportedly, has asked for a revamp in this model, saying such models are ideal for countries such as India where sourcing, stocking and delivering goods is a challenge.

“This model will also help millions of small entrepreneurs without any experience in selling products digitally to go online besides allowing Amazon to operate its core business, which is to sell its own merchandise,” a person aware of the matter told ET.

India allows 100% Foreign Direct Investment (FDI) in the marketplace model that Amazon operates in India, as do home-grown but heavily foreign-funded firms Flipkart and Snapdeal.

As per Morgan Stanley, India's ecommerce business will increase to $119 billion by 2020.

(Image: Indiatimes)