Amazon Scrambles as Reliance Industries Gets More Aggressive With Future Acquisition

Amazon remains locked in a protracted legal battle with Reliance Industries to control the fate of Future Group and gain the lion’s share of India’s retail market, according to a report Monday (March 21) in The Wall Street Journal.

India is home to an eCommerce market worth nearly $1 trillion, per the report, with retail sales expected to jump from $883 billion in 2020 to $1.3 trillion by 2024, according to Forrester Research data. Mom-and-pop shops comprise about three-fourths of India’s brick-and-mortar retail sector, the report noted.

Amazon invested about $200 million in an unlisted gift voucher unit of Future Group in 2019, attaching noncompete clauses that prohibited Future Group from selling its retail assets to its rivals and gave Amazon a first right of refusal.

Future violated the noncompete deal and sold its retail business to Reliance for $3.4 billion in 2020, kicking off an ongoing legal battle with Amazon that could be nearing its conclusion — or not.

As the saga continues, Reliance Industries Chairman Mukesh Ambani led a recent effort to taken possession of a large portion of Future Retail’s stores, many of which had failed to pay rent on their Reliance-held property leases.

Last year, India’s competition regulator suspended its approval of Amazon’s 2019 deal with Future, after Future argued that the original noncompete agreement was a roundabout way to get around India’s 2018 foreign investment law.

Related: Amazon: Out-of-Court Settlement With Future Retail Is Impossible

Amazon told India’s top court last week that talks to settle the dispute with Future is at a stalemate. Amazon purchased a 49% stake in Future Coupons, the parent company of Future Retail, in 2019.

Arbitration between Amazon and Future commenced in Singapore, but both sides have also been waging a legal battle in India’s courts.

Future has argued that since the deal with Amazon isn’t backed by the Competition Commission of India, it has “no legal existence” in India, and Amazon can’t use it to defend its stance.