Amazon puts an additional $260M into its Indian business

Amazon has topped up its investment in its India business with another $260 million. The funding was disclosed in regulatory documents filed last month and first reported by Indian financial publication Mint.

The infusion of capital comes in time to prepare Amazon India (officially named Amazon Seller Services Pvt Ltd) for the holiday shopping season, which centers around the Dussehra and Diwali festivals in the fall. Amazon India’s chief rival for the attention of online shoppers will be Flipkart, which raised $1.5 billion at a valuation of $11.6 billion three months ago from a noteworthy roster of investors including Amazon rival eBay, Microsoft, and Tencent. Another important competitor is Alibaba-backed Paytm.

Amazon pumped $2 billion into its Indian marketplace in summer 2014 and launched Amazon Prime there last year, with annual memberships costing 999 rupees (about $15, though discounts are available for new members). Amazon India will run its first Prime Day on July 10, to coincide with the online shopping/promotional event’s timing in the U.S. and other markets.

The e-commerce behemoth is likely to continue pumping money into its India unit. CEO Jeff Bezos promised to invest $5 billion into India during Prime Minister Narendra Modi’s visit to the U.S. last year, up from the $2 billion he had previously pledged. Since that amount is meant to develop India’s tech and startup industries, however, it’s unclear exactly how much will be put specifically into Amazon India.

China and the U.S. are still the world’s largest e-commerce markets, but India is the fastest-growing one, with online retail sales expected to reach $64 billion by 2021, at a five-year compound annual growth rate of 31.2 percent.

But that doesn’t mean its smooth sailing for India’s biggest e-commerce players as they struggle with high operating costs. Amazon used to count Snapdeal among its main rivals, but Snapdeal has been trying to cut costs and in January was reportedly in talks to raise a down round from SoftBank. Despite its new funding, Flipkart has also faced its own troubles, including valuation markdowns from several mutual funds.

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