Amidst legal restrictions on E-commerce companies in India Amazon and its top Indian seller Cloudtail have decided to end the joint venture after May 2022. This was announced through a statement by both the firms. The ongoing investigation against Amazon is accounted as a reason for the decision .

Billionaire N.R. Narayana Murthy’s Catamaran, the parent firm of Cloudtail, and Amazon launched the joint venture in the country in 2014. The joint venture restructured its ownership in 2019 following India’s regulatory changes — more on this shortly.

The Indian watchdog — the Competition Commission of India — ordered an investigation into the firms last year for allegedly promoting select sellers on their e-commerce platforms and using business practices that stifle competition.

In a statement, the two firms said Cloudtail — registered as Prione Business Services — enabled over 300,000 sellers and entrepreneurs to go online and provided 4 million merchants with digital payment capabilities. The joint venture, they said, helped merchants and small businesses access millions of customers in India.

Cloudtail is one of the largest sellers on Amazon in India. Indian newspaper Economic Times reported that Cloudtail will cease operations next year. The e-commerce group has stakes in a few more third-party sellers, including Appario Retail, which is its joint venture with Patni Group. Reuters reported that Amazon has held talks with Patni Group to explore whether they want to continue the joint venture.

“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitization and empowered hundreds of thousands of SMBs across big and small towns,” said M.D. Ranganath, president of Catamaran, in a statement.

“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” said Amit Agarwal, Global Senior VP and country head of Amazon India, in a statement.