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Amazon appears poised to deepen its investments in India after its cloud computing arm crossed the $2.36 billion (Rs 20,332 crore) revenue mark, with the company’s strong financial performance coinciding with a landmark government proposal that could reshape the country’s foreign investment regime for e-commerce.
Amazon Web Services (AWS) India reported a 22% increase in operating revenue to $2.36 billion (Rs 20,332.3 crore) for the financial year ended March 31, 2026, underlining the growing demand for cloud infrastructure, artificial intelligence and digital transformation services across India’s economy.
The results come just days after the government proposed the first significant relaxation of India’s decade-old foreign direct investment (FDI) restrictions in e-commerce, potentially opening a new avenue for Amazon to expand its presence beyond cloud services into export-oriented online retail.
Under Press Note 3 (2026 Series) issued on July 23, the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed allowing foreign-funded e-commerce companies to own inventory exclusively for exports of goods manufactured in India. Once corresponding amendments are notified under the Foreign Exchange Management (Non-Debt Instruments) Rules, global platforms such as Amazon would, for the first time, be permitted to purchase, store and export products directly from India instead of merely operating as online marketplaces.
The proposal marks a significant departure from India’s long-standing FDI framework, which has permitted 100% foreign investment only in marketplace-based e-commerce while prohibiting inventory-led operations. The distinction was introduced to protect millions of small retailers and prevent foreign companies from effectively entering multi-brand retail through online platforms.
For Amazon, the policy change arrives as its India businesses continue to gain scale.
AWS India’s latest filings show revenue has more than doubled in five years, rising from $1.04 billion (Rs 8,956 crore) in FY2021-22 to $2.36 billion (Rs 20,332 crore) in FY2025-26. While revenue growth remained robust, profitability moderated as the company stepped up investments. Net profit fell to $28.2 million (Rs 242.4 crore) from $32.7 million (Rs 281.5 crore) a year earlier, with net margins narrowing to 1.19% from 1.68%. EBITDA stood at $58.6 million (Rs 503.7 crore).
Even so, the company strengthened its financial position. Net worth rose to $378 million (Rs 3,253.5 crore) while cash and cash equivalents increased to $168 million (Rs 1,447.9 crore), reflecting continued cash generation despite higher operating costs.
The convergence of AWS’s expanding financial footprint and the proposed policy liberalization could reinforce Amazon’s broader India strategy. The company has already invested billions of dollars in cloud infrastructure, logistics and digital services, and the proposed export inventory model could enable it to build integrated sourcing, warehousing and export operations for products manufactured in India.
Trade experts, however, believe the implications extend well beyond exports.
According to the Global Trade Research Initiative (GTRI), the export-only inventory model represents the first breach in India’s long-standing prohibition on foreign-funded inventory-based e-commerce. Once multinational platforms are allowed to own and manage inventory for exports, pressure is likely to build for extending the same model to domestic sales. GTRI argues that maintaining separate inventories for export and domestic markets would be difficult in practice, making the latest proposal a potential steppingstone towards a broader inventory-led e-commerce regime.
Such a shift would fundamentally alter India’s online retail landscape. Inventory-led platforms exercise greater control over pricing, product selection, fulfilment and logistics than marketplace operators, enabling them to offer deeper discounts, exclusive products and integrated supply chains—advantages that domestic trader associations have long argued could disadvantage millions of small retailers.
The policy proposal also comes at a sensitive time in India-U.S. commercial relations.
GTRI contends that the move adds to a series of unilateral market-access concessions extended to U.S. businesses, including tariff reductions on several imported products and regulatory easing across multiple sectors. It argues that these measures could weaken India’s negotiating leverage in future trade discussions by granting commercially valuable access without securing reciprocal benefits for Indian exporters.
Supporters of the proposal, however, argue that allowing foreign e-commerce companies to own inventory for exports could strengthen India’s manufacturing ecosystem by integrating domestic producers into global supply chains, improving logistics efficiencies and expanding export opportunities under the government’s “Make in India” initiative.
For Amazon, the timing could prove significant. AWS’s strong revenue growth demonstrates the company’s deepening role in India’s digital economy, while the proposed FDI reforms could eventually provide a pathway for expanding its physical commerce operations. Whether the export-only exception remains narrowly defined or evolves into a broader liberalization of India’s e-commerce regime may determine the next phase of Amazon’s investment strategy in one of its fastest-growing global markets.
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