Amazon India’s largest merchant is not going to sell mobile phones. Here’s why

Cloudtail, which is Amazon India’s largest merchant, has to adhere to the foreign investment policies, and won’t sell mobile phones any more.
As per the norms, single seller cannot account for more than 25% of a marketplace's total sales.

Mobile phones make up a huge chunk for Amazon India and Cloudtail contributes a significant portion of revenue.

To begin with, Cloudtail, which is a joint venture between Amazon Asia and Infosys founder Narayan Murthy's Catamaran, has stopped selling newly launched smartphones.

Cloudtail will focus on FMCG, lifestyle products and consumer electronics.

"The easiest way for Cloudtail to comply with the FDI norms is to move out of high-value categories, especially smartphones, which is estimated to contribute more than half to its revenues. The process has started and Cloudtail is currently liquidating existing stock and has stopped sourcing mobile phones," a leading seller at Amazon India told ET.

Now, mobile phone makers will bill their products to Amazon Wholesale (India) Pvt Ltd, an affiliate of Amazon.com Inc.