Amazon’s deal with Future Retail stuck on new e-commerce FDI norms

Amazon’s deal with Future Retail stuck on new e-commerce FDI norms
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Mumbai, Jan 1: Shares of Kishore Biyani-promoted Future Retail have fallen over 11 per cent in the past four trading sessions after the government announced changes to foreign direct investment (FDI) norms for e-commerce companies.
The Centre last week announced changes to e-commerce policy to check predatory pricing and deep discounting. According to the new policy, e-commerce portals can’t force vendors to have exclusive deals, and will give uniform terms to all sellers. The government also aims to put a cap of 25 per cent on the inventory that a marketplace entity or its group companies can purchase from a vendor.
According to market buzz, Amazon’s deal with Future Retail is not progressing in the wake of policy changes. But Kishore Biyani, chairman and managing director of Future Retail, denied such development. An Amazon spokesperson said: “We do not comment on speculations of what we may or may not do.”
Amazon is in talks to pick up a 10 per cent stake in Future Retail for Rs 2,000 crore through foreign portfolio investor (FPI) route. “The Future Retail stock ran on the premise of Amazon-Future Retail deal. Hence, the stock is correcting as the deal has not happened yet. Amazon must be studying the new policy changes,” said the research head of a Mumbai-based brokerage wishing not to be quoted.