Amazon is considering spinning off its India operations and listing them locally, according to industry sources. As the second-largest e-commerce player in the country after Flipkart, the company has begun initial discussions with investment banks to evaluate this possibility. Reports indicate that Amazon has approached multiple banks in India and is also working with its Wall Street partner, JP Morgan.
Discussions with banking advisors have centered on factors such as data localization requirements and the ability to maintain direct inventory. Amazon’s management, including senior executives from India and the US, recently engaged with several investment banks, though talks remain in the early stages.
Legal experts suggest that Amazon may struggle to achieve the desired valuation due to ongoing investigations by the Competition Commission of India. The regulator has launched a probe into Amazon and Flipkart over allegations of anti-competitive practices, including deep discounting and preferential treatment of select sellers.
Amazon declined to comment, stating that it does not respond to speculation.
Current regulations prevent e-commerce companies with over 51% foreign direct investment from holding inventory, restricting them to a marketplace model where independent sellers list their products. These platforms are prohibited from influencing prices, favoring certain sellers, or offering selective deep discounts. Companies must provide equal opportunities for all sellers and avoid controlling inventory. If a seller sources over 25% of its inventory from a marketplace entity or its group companies, it is classified as inventory-based, which is not permitted under existing laws.
Domestic firms, however, can operate on an inventory-led model, allowing them to manage stock, control branding, and optimize logistics. While Amazon may not immediately adopt this approach, spinning off its Indian entity and increasing local shareholder participation could offer greater operational flexibility in the future.
The move comes amid leadership changes in Amazon’s India division and increasing competition from Flipkart and emerging players like Meesho. Flipkart continues to dominate nearly half of the e-commerce market, while Meesho, backed by SoftBank, has secured over $500 million in fresh funding.
Amazon has also entered the quick commerce segment but faces stiff competition from Swiggy Instamart, Blinkit, and Zepto, which already have a strong presence.
Meanwhile, Flipkart is also preparing for a public listing. The company is in the process of shifting its legal domicile from Singapore to India, a necessary step before launching an IPO. Reports indicate that Flipkart has engaged with bankers and is targeting a listing within the next 12 to 15 months.
