Mukesh Ambani’s Reliance Industries and US giant Amazon have been vying to get an upper hand in one of the world’s fastest-growing retail markets which is India. This is the reason why for more than a year, Inc and Future Group have been locked in a complex legal stand-off that has stalled Future’s $3.4 billion sale of assets to rival Reliance Industries.

After trading barbs in courtrooms for months, Amazon and Future unexpectedly agreed on March 3 to hold discussions to resolve their dispute. But the big question is what led to the sudden change in tone.


In 2019, Amazon and Future, number two player in India behind market leader Reliance, became business partners when the US company invested $200 million in a unit of the Indian group, according to a Reuters report.

That deal, Amazon argues, came with non-compete clauses that prohibited Future from selling retail assets to certain rivals, including Reliance. The deal also included clauses for settlement of any disputes under rules laid down by the Singapore International Arbitration Centre.

But in 2020, Future – hit hard by the Covid-19 pandemic – decided to sell assets to Reliance.

Amazon then approached Singapore arbitrators and successfully stopped the sale. Both parties have also challenged each other with lawsuits in courts in India, including the Supreme Court.


In a sudden move on February 25, Reliance, which had not played a public role in the dispute, started executing a de facto takeover of some 500 Future stores that represent the crown jewels of its retail network, the Reuters report said.

Reliance had assumed many of the leases held by cash-strapped Future and has now moved to take over possession citing missed rental payments.

That spooked Amazon. On March 3, Amazon cited takeover of shops and extended an olive branch during a Supreme Court hearing, saying the “whirlpool” of litigation must end. Future agreed to the talks, which are currently ongoing, Reuters reported.


Amazon at a Supreme Court hearing unexpectedly called for cordial talks to end the dispute – a proposal Future agreed to. “People have taken over shops … let’s at least have a conversation,” Amazon’s lawyer Gopal Subramanium said.

“What will Amazon fight for now? The shops are gone,” Reuters reported, quoting a source close to Amazon with knowledge of the legal dispute.

Whatever the outcome of the talks, analysts say Amazon had gravely underestimated Reliance. “If anybody should have seen this coming, it should have been Amazon and they should have prepared against it,” Devangshu Dutta of retail consultancy Third Eyesight told Reuters.


At stake is whether Amazon can become a bigger force in a $900 billion retail market, with 1.3 billion consumers, than Reliance.

Reliance has 1,100 supermarkets, while Future has around 1,500. Both are expanding fast into e-commerce, but the Future deal will immediately boost the retail footprint of Reliance, which has attracted marquee foreign investors in the business.

For its part, Amazon has invested $6.5 billion in India, which it counts as a key growth market where it is a leading e-commerce player. The Future partnership had already allowed Amazon to boost its online portfolio of grocery deliveries by integrating the Indian company’s stores on its website.


India today

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