Amazon claims that its Indian partner Future Group broke a contract by entering into a $3.4 billion sale agreement with billionaire Mukesh Ambani’s Reliance Industries. This dispute could make the country’s biggest retail deal fall apart.
Amazon founder Jeff Bezos is focusing on the Indian market, with its 1.3 billion consumers. He promised to invest $6.5 billion in India.
But there is also competition from Walmart, which splurged $16 billion two years ago, to buy Indian e-commerce leader Flipkart Online Services.
“We have initiated steps to enforce our contractual rights,” stated Amazon. “As the matter is sub-judice, we can’t provide details.” A representative for Future Group didn’t immediately respond to a request for comment.
Amazon “certainly would’ve incorporated a strong non-compete and first right of refusal,” stated Arvind Singhal of Technopak Advisors. “Looks like that clause has been breached.”