Amazon to Invest $35 Billion in India’s AI Sector as Part of 2030 Expansion Plan

As hyperscalers compete for market share, Amazon pledged on December 20 to invest more than $35 billion in India's cloud and AI space by 2030. The pledge, which was made public at the Amazon Smbhav Summit in New Delhi, expands on the almost $40 billion that has previously been invested in the nation. The new funds will focus on AI-driven digitisation, export expansion, and job development, according to a press statement from Amazon.

This aligns with India's national ambitions to strengthen its local AI environment. According to Amazon, the initiative is anticipated to increase exports to $80 billion by 2030, create an extra 1 million direct, indirect, induced, and seasonal jobs in India, and help 15 million small companies with AI.

Amazon Betting High on India’s Booming Digital Economy

The investment demonstrates Amazon's stake in India's thriving digital economy, where it has been constructing data centres, fulfilment centres, and payment infrastructure. Additionally, as Big Tech companies step up their efforts to enter the market, Microsoft recently announced plans to invest $17.5 billion in India's AI infrastructure.

Amazon is delighted to have contributed to India's digital development over the past 15 years, according to Amit Agarwal, senior vice president for emerging markets. As it democratises access to AI for millions of Indians, Amazon looks forward to continuing to be a driving force behind India's development.

Amazon’s Contribution in India’s Economy

According to Amazon, it has made it possible for India to export more than $20 billion. By 2030, the company wants to enable a total of $80 billion in e-commerce exports from India. The company started a manufacturing-focused programme called "Accelerate Exports" to link digital entrepreneurs with manufacturers and help manufacturers become successful international sellers.

Amazon will conduct on-site onboarding efforts in more than ten manufacturing clusters throughout India, including Tirupur, Kanpur, and Surat, as part of the initiative. Amazon and the Apparel Export Promotion Council of India announced a significant collaboration at the Smbhav summit to expand and scale the initiative throughout India.

Amazon India Eliminated Referral Fee for Sellers

According to an Economic Times report, Amazon India has eliminated the referral fee for sellers of goods under INR 1,000 until December 31. Depending on the product category, the referral fee, a commission that Amazon charges for every sale, normally varies from 2 to 16.5%. The waiver was previously only valid through November 30. Although not all products are covered by the most recent extension, the move is comparable to a tactic used by Flipkart, which is supported by Walmart.

Flipkart implemented a zero-commission policy for items under INR 1,000 two weeks ago. Additionally, regardless of price, vendors can now post products on Shopsy, its hypervalue portal, without having to pay a commission. Value-commerce websites like Meesho, which primarily rely on advertising and logistics markups rather than seller commissions to generate revenue, are the target of the campaign.