Amazon JV Indian Seller, Cloudtail to stop operation from May 2022
11th August 2021, Mumbai:
Cloudtail India plans to stop operations from May 2022 with the company’s joint venture partners Amazon and N.R. Narayana Murthy-owned Catamaran Ventures not renewing the seven years old partnership next year.
Cloudtail India is a wholly-owned subsidiary of Prione Business Services. Prione is a joint venture between Catamaran and Amazon. The two partners are going to exit from the business at a time when there is stricter surveillance on the operations of the foreign e-commerce marketplaces in the country.
The two partners have mutually decided to not continue their joint venture beyond the end of its current term ending on May 19, 2022.
Indian rules currently prohibit a foreign entity running a marketplace as well as its group companies from equity participation in any of the sellers or having control over their inventory.
As per the RBI norms of 2013, a group company means two or more enterprises which, directly or indirectly, are in a position to exercise 26% or more voting rights in the other enterprise or can appoint more than 50% members of the board of directors in the other enterprise.
As a result, Amazon had to reduce its stake from 49 per cent to 24 per cent in Cloudtail and Appario, the two top sellers on its marketplace.
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