Leading American e-commerce retailer Amazon announced plans early in July to open new fulfillment centers to prepare for India’s festive season beginning in October, a move it also made in September 2015 for the same reason. Fulfillment centers, rather than increasing interactions between Amazon itself and Indian customers, facilitate interactions between Indian businesses and the domestic market, and save local businesses money on storage costs in the process. The announcement of Amazon’s plans to expand its Indian infrastructure comes soon after CEO Jeff Bezos also announced in June that he would more than double Amazon’s investment in India, raising it from $2 to $5 billion, citing India’s future as a major Asian tech hub and its status as Amazon’s fastest-growing region.
Although Amazon faces competition from domestic e-commerce retailers like Flipkart and Snapdeal, it has successfully made a name for itself by adapting its strategies to appeal to local populations. For example, it has launched online bookstores dedicated to seven different local Indian languages, partnered with local companies to access markets for specific products like televisions, and expanded existing American programs exclusively to India, like Kindle Unlimited.
India has indeed revealed itself to be a promising market for the wider technology industry. The biggest names in tech, including Facebook, Google, and Microsoft, have shown a deepening interest in conducting business in India. The three internet companies spearheaded initiatives to spread internet access across rural India, a mutually beneficial endeavor for the one billion unconnected Indian citizens and for American tech giants. Messaging services and social media platforms like Whatsapp and Twitter have also invested in India's tech sector, spurred by the projection that India will overtake the US become the second largest smartphone market by 2017.
US investments in India’s tech sector have not gone unreciprocated, and have shown the US and India’s mutual importance to one another. Indian Prime Minister Narendra Modi visited Silicon Valley in September 2015 and stressed the importance technology, which he believes will be a driving factor in India’s development. His visit resulted in the launch of a new direct flight route between San Francisco and Delhi, the first direct flight connecting Silicon Valley to India. India has also shown flexibility on national foreign investment policies, announcing a relaxation of norms, particularly targeted towards attracting investment from Apple to spur its entry into the Indian market.
Andrea Moneton is a Research Intern at the East-West Center in Washington and a student at Georgetown University’s School of Foreign Service.