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Amazon targets India growth with $3 Billion investment boost

Amazon.com Inc. will invest $3 billion more to build its business in India, stepping up its bet that the country will become a major online-shopping market that will fuel sales growth.

The latest commitment, unveiled by Chief Executive Officer Jeff Bezos at the U.S.-India Business Council’s Leadership Summit in Washington, more than doubles Amazon’s total pledged investment since 2014 to $5 billion.

Amazon has targeted India for international growth after pulling back from China due to fierce competition from that country’s e-commerce giant Alibaba Group Holding Ltd. In addition to seeking new customers, Amazon is also looking in India for new inventory to sell globally. Amazon, which gets most of its international revenue from the U.K., Japan and Germany, doesn’t break out sales from India. Revenue from a group of other international markets, including India, reached $7.4 billion in 2015, or 6.9 percent of total sales.

“The added investment reflects the success to-date of Amazon in India, as well as a bright outlook for the e-commerce market in the region,” said Colin Sebastian, an analyst at Robert W. Baird & Co. “It’s really down to a two or maybe three-horse race, and Amazon clearly would like to be the winner.”

Amazon, which debuted in India in 2013, has been spending to challenge local e-commerce companies Flipkart and Snapdeal. Bezos said at a conference last week that Amazon is opening more distribution centers and doing more last-mile deliveries.

(Source: Bloomberg )