Business

`Amazon’s Hyderabad campus is significant market signalling’

Report by T S Sudhir


E-commerce multinational giant Amazon will formally open its 10 acre campus in Hyderabad, its biggest outside the United States, on Wednesday. It is being seen as a major endorsement for Hyderabad and will serve as a significant market signalling to other players to look at the Telangana capital seriously. 

Located in the IT hub of Gachibowli, the centre where construction started three years ago, can set up to 10000 employees. It will manage the backend operations for Amazon’s global business and technology teams. 

T S Sudhir of Filter Kaapi spoke to Jayesh Ranjan, Prinicipal Secretary, Industry and IT in the Government of Telangana on what the investment means for Hyderabad. 

Sudhir : Congratulations. This is a major feather in Hyderabad’s cap.

Jayesh : Thankyou. Yes, it is a very significant move by Amazon. They have bases in multiple cities where they operate out of leased out properties so to take the decision to invest in their own campus signifies a long-term engagement, in perpetuity with Hyderabad and Telangana. It shows that the city offers value proposition. To set up the largest campus outside the USA, is a strong endorsement in our state and government. 

Sudhir : In terms of employment, what are the numbers we are looking at?

Jayesh : Up to about 20000 jobs eventually.

Sudhir : Amazon has had a relationship with Hyderabad, they already have a presence in the city but this campus takes it to another level, isn’t it?

Jayesh : Amazon already has its fulfillment centre here, close to the airport. It is the largest facility in Asia. It expanded its logistics hub from 4 lakh square feet to 5.8 lakh square feet of area. It is a highly automated facility. They have their sorting centre here. 

Sudhir : In the past, we have seen cities wooing multinationals by offering various incentives like reduced land rates. Were any concessions of the sort given to Amazon?

Jayesh : No, none at all. They bought land at the market rate. All these concessions were given only at the early stages. Even Bengaluru has stopped giving concessions now. No city gives it. 

Sudhir : Two advantages one sees immediately. One is the jobs and two, the branding for Hyderabad. Talk us through how else does Hyderabad gain by Amazon’s presence here.

Jayesh : When Microsoft came to Hyderabad in the late 1990s, many other IT firms followed suit. That is because they knew Microsoft would have done due diligence before deciding on Hyderabad. The same will happen in this case because obviously Amazon will interact with others and tell them the advantage that the city offers. There is talent, there is infrastructure. Amazon setting up its campus here will be a major market signalling.

Sudhir : Didn’t Amazon look at any other city before deciding on Hyderabad?

Jayesh : In fact, this project was not meant for Hyderabad. Amazon had bought land in Bengaluru. But then it was hit unexpectedly by double taxation issues where the seller had to pay tax when he put an item for sale on the Amazon platform and then pay tax again when it was sold. We approached them and assured them a fairness and transparency. 

Sudhir : Amazon is not the only one now in Hyderabad. Several e-commerce outlets have their presence here, which is huge.

Jayesh : Yes. Flipkart has its largest warehouse in India in Hyderabad as well as a datacentre. Big Basket has its collection points and stocking points here. Amazon has piloted several of its innovative solutions in Hyderabad. Amazon has got into the grocery space with Amazon Pantry which it introduced in Hyderabad. 

The then Industry minister KT Rama Rao (right) with Jayesh Ranjan (extreme left) when the foundation stone was laid for the Amazon campus
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