Murthy will make his investments through his firm Catamaran Ventures, Catamaran is partnering with Amazon Asia to offer services that help offline sellers and Server Message Blocks in India to get online and to take advantage of the fast-growing online customer base in the country.” NR Narayana Murthy does not have a board role in any of our investments.
Since FDI in e-commerce is not allowed in India, Amazon and Catamaran have reportedly consulted some legal firms and coming up with a mechanism to bypass the FDI restrictions. Amazon and Catamaran are in talks to form a joint venture for the back end operations. The joint venture will be a holding company in which Catamaran will hold 51% stake. As it will be an Indian entity, its subsidiary will be called an Indian company and this subsidiary will roll out the e-commerce business.
Amazon had entered India last year as a third-party marketplace operator, providing platform for others to sell, instead of selling directly because of the absence of FDI in retail in the country including restrictions in the e-commerce sector. Despite being a strong global brand having both the financial muscle and expertise to create a formidable presence in India, the $75-billion e-commerce giant felt restricted, especially in its control over logistics.
The other concern was the recent consolidations that are taking place in the country’s e-commerce space, with India’s largest e-commerce company Flipkart recently acquired online fashion retailer Myntra to keep foreign giants such as Amazon at bay. The e-tailer was chalking out a new initiatives and the Infosys joint venture would allow Amazon to strengthen its foothold in the Indian market