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Amazon investing $2 billion more in India as online retail booms

The announcement comes a day after an Indian retailer got $1 billion in funding

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Amazon.com is investing US$2 billion more in India, which is witnessing an online retail boom.

The online retailer has been expanding in India, and earlier this week said it was setting up five new fulfillment centers in the country, which will double its total storage capacity to over half a million square feet (over 46,500 square meters).

The investment announcement comes a day after a top Indian online retailer, Flipkart Internet, said it had raised $1 billion in new funding.

India's online retail spending is forecast to reach $16 billion by 2018, an eightfold increase from 2013, according to Forrester Research. "Mobile Internet access will be a catalyst for the growth of online retail in India," wrote Forrester analyst Jitender Miglani in March.

India will be Amazon's fastest country to reach one billion dollars in gross sales if current growth rates continue, Amazon said Wednesday.

The company did not say how or over what period it will make the investment.

"We don't comment on any future plans," a company spokeswoman said. "We are committed to aggressively investing in growing the business and relentlessly focus on raising the bar for online shopping experience in India."

As a result of Indian government restrictions on foreign investment in online retail in India, Amazon set up a marketplace last year, Amazon.in, which offers sales and order fulfillment services to Indian retailers, but does not sell directly.

The company also operates the Junglee.com website, a search and comparison site for Indian shoppers who can browse for a variety of retailers, including offline sellers and vendors of second-hand goods.

The Amazon marketplace offers over 17 million products from thousands of small and medium-size businesses.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com



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