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In September 2014, Amazon founder Jeff Bezos stood atop a truck in Bengaluru, dressed in traditional attire, flashing a $2 billion check: a brash demonstration of the American giant’s ambitions in India. Less than a decade later, with many more billions invested and Indian regulators increasingly taking a dim view of U.S. big tech, Amazon might be losing patience with the South Asian nation.

Over the last week, Amazon has said it would close three ventures in India: food delivery, its education tech business and a wholesale e-commerce website. Closing these small subsidiaries doesn’t at first glance look like a major defeat. But the exit from wholesale e-commerce is important: It means that for now at least, Amazon is conceding to Walmart-backed Flipkart and Reliance in “kirana-tech."

“Kirana" is a Hindi word for India’s vast number of small shops, which still make up most of India’s $932 billion retail economy, according to CB Insights.

Known as Amazon Distribution, Amazon’s offering was a dedicated platform for business to business e-commerce for kiranas, department stores and the like. It supplied them with a bewildering variety of products spanning health, beauty, baby care, food, laundry and stationery. And it competed with Flipkart Wholesale and Reliance Industries-owned JioMart.

Meanwhile the online B2B market for kiranas, worth $5 billion in 2021, could potentially grow to $90 billion to $100 billion by 2030, according to Indian consulting firm Redseer. And since foreign investment in multibrand retail is restricted in India, setting up a supply chain for corner shops would have been one important way to cement Amazon’s presence.

India might simply be collateral damage in Amazon’s general belt-tightening—the firm confirmed earlier this month it is laying off employees. Amazon Distribution’s probable high cash burn in a crowded space would also have made it an easy target for downsizing. According to AB Bernstein estimates, Amazon’s overall India margin on earnings before interest, tax, depreciation and amortization is still about minus 5-10% despite more than $6.5 billion of investment over the years.

But the Indian government’s growing hostility toward Amazon and other American tech companies—and rising competition from politically connected homegrown champions—presumably doesn’t help.

Earlier this year, India’s antitrust watchdog raided top sellers on Amazon and Flipkart’s online marketplaces. New Delhi alleges that the e-commerce companies had been unfairly promoting preferred sellers on their websites. The brazen seizure of Amazon-invested Future Retail stores by local rival Reliance earlier this year—despite ongoing litigation to prevent that—was another slap in the face.

Amazon itself has been relatively tight-lipped on its recent moves. It says it doesn’t take such decisions lightly, and it remains focused on providing its growing customer base the best online shopping experience.

But with a possible global recession looming and multinational tech firms retrenching, the knives are out. In India, a hypercompetitive market with increasingly ornery regulators, the cuts might end up being deeper than expected.

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