After Walmart, Amazon lobbies in US for Indian FDI

After supermarket giant Walmart, it is online retail major Amazon which has begun lobbying with the US lawmakers to seek their support for facilitating its "foreign direct investment in India".

According to lobby disclosure reports filed with the US Senate, Amazon.com and its group entities including Amazon Corporate LLC have been lobbying on various issues since at least year 2000.

However, it was only in the last quarter, ended December 31, 2013, when its lobbying issues included "foreign direct investment in India", shows the latest disclosure report dated January 22, 2014.

During this quarter, Amazon spent a total amount of USD 960,000 (over Rs six crore) on numerous lobbying issues, which included "issues related to free trade agreements", "Transaltantic Trade and Investment Partnership", as also matters relating to various Acts and proposals in the US.

Among others, Amazon lobbied with the US Trade Representative, the Department of Commerce, the Department of State and the US House of Representatives on these issues.

During entire 2013, Amazon spent a total amount of USD 3.45 million on lobbying, while such expenses have been mostly rising since the year 2000 when it began lobbying, shows the disclosure reports filed with the Senate.

The total lobbying expenses during these 13 years exceed USD 21.5 million (about Rs 136 crore), but any Indian issue has figured among the "specific lobbying issues" in these reports for the first time ever.

Amazon's lobbying in the US comes at a time when Indian government has floated a discussion paper on allowing FDI into e-commerce retail business in the country. A final decision would be taken after taking into account responses to this discussion paper.

Earlier in November 2013, Amazon had said it is 'engaging' with the Indian government for relaxing of FDI norms in the e-commerce space, saying such a move would help it begin "retailing products" as well, in addition to its current marketplace business model.

The company launched operations in India in June last year with its marketplace model, under which Amazon.in does not sell products directly to customers but only provides a platform to sellers.

The issue of lobbying among the US lawmakers for FDI in India had snowballed into a major political controversy late in 2012 after such disclosures by Walmart came to the fore.

The government later announced a probe into Walmart's lobbying activities, but the inquiry remained inconclusive in absence of sufficient evidence for any wrongdoings.

Lobbying is legally permitted in the US, but the companies and their lobbyists need to mandatorily file disclosure reports every quarter for such activities.

Interestingly, Walmart did not lobby on any India-specific issues during the last quarter, when its total lobbying expenses stood at USD 1.95 million and one of the issue for lobby included "discussions regarding investments overseas".

In the second quarter of 2013 also, Walmart had halted its India-specific lobbying, but resumed the same in the subsequent quarter, that is between July-September 2013.

Recently, Walmart CEO Doug McMillon told PTI on the sidelines of the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland that it would wait for further clarity on rules for entering the multi-brand retail business.

Walmart is currently present in India with its cash and carry business under its Best Price brand, but is yet to enter multi-brand retail business where the government has allowed 51 per cent FDI despite huge political opposition.

While Walmart is seeking further relaxation in FDI rules, a few states such as Delhi and Rajasthan have already reversed the approvals given for multi-brand FDI by their predecessors. These developments have added to the uncertainty regarding retail business FDI framework.

However, Walmart recently registered a new company, 'Wal-Mart India Private Ltd', in India earlier last month, on which Walmart CEO said that the group was positioning itself for the future.

Asked about possible timeline for multi brand entry, McMillon said it is not possible as of now to predict any timeline as it would depend on the decision taken by the "people of India and the government of India with regard to the regulations for foreign direct investment."

"We will respectfully wait, answer all questions and try to demonstrate that having Walmart in India is a good thing for the country," he had said.

After parting ways with Bharti group in October last year, Walmart had said it was studying the feasibility of India's foreign direct investment (FDI) policy in multi-brand retail before finalising plans to enter the segment.

In its Action Taken Report on Walmart probe, the government had said it would initiate fresh action against Walmart if an ongoing 'foreign corrupt practices' probe by US authorities reveals any violation in India by the retail giant.