India has allowed 100 per cent FDI in food ecommerce and a warzone has already been formed

India has relaxed its Foreign Direct Investment (FDI) norms and also allowed 100 per cent FDI in trading of food products.

That said, a competition seems to be simmering between two top American sellers, Amazon and Walmart.

In the wake of the new FDI policy, these two giants may explore the business in India and also open online stores as they can create models and sell food products in India.

Presently, Amazon hosts third-party sellers through its marketplace and Walmart operates cash-and-carry stores that sell to retailers and traders.

"Amazon is interested in sourcing and selling grocery, fruit and vegetables online through its marketplace. In this case, Amazon itself can act as a seller and need not rely on third parties. It works with farmers in the US under a programme called Amazon Fresh and would like to replicate the model in India," a person familiar with Amazon's plan told ET.

The person further told ET that Amazon's only fear is if the food ecommerce FDI policy were to mirror the single-brand retail policy - only those with offline presence are allowed to sell online.

"We welcome the move to permit 100 per cent FDI in trading, including ecommerce, of food products manufactured or produced in India. We believe this will positively impact the food and food processing industry to reach a wider customer base with ease," an Amazon spokesperson told ET.

Meanwhile, Walmart has already stated it is interested in selling food products directly to Indian consumers through brick-and-mortar and online stores.

"The business of brick-and-mortar food retail stores and online sale of food products is of interest to us, but we have to evaluate the policy guidelines once they are notified," Walmart India Chief Executive Krish Iyer had told ET in an interview.

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