As Amazon looks to step up its challenge to local e-commerce players in India, the US online retail giant announced the decision of investing $3 billion in India this year. The announcement was made by the chief executive f the company Jeff Bezos.

Bringing Amazon’s total investment in India to $5 billion, the new money comes on top of the $2 billion announced in 2014.

“We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy,” Bezos said in a statement after the U.S.-India Business Council’s forty-first Annual Leadership Summit in Washington. This meeting was attended by Indian Prime Minister Narendra Modi and Bezos also met up with Modi at the meeting.

For Amazon growth in international markets which have lagged the growth in North America and the company’s investment comes as it looks to stoke growth in those markets. Amazon logged a $91 million operating loss in its international markets in 2015 compared to a reported $2.75 billion operating profit in North America. The sale of the company in the international markets has also significantly lagged North America.

Due to local foreign direct investment rules in India, goods offered by third parties are only sold by the company via its website in the country.

Local start-ups in India which have managed to raise sizeable funding rounds is providing stiff competition in the Indian online retail market to the U.S. e-commerce giant.

While Flipkart got $700 million last year, valuing it at around $15 billion, earlier this year, online marketplace Snapdeal raised $200 million at a valuation of around $6.5 billion.

But both the companies named above have had ot face hurdles in their respective business journeys. While Snapdeal announced a round of layoffs in February, major investors in Flipkart including Morgan Stanley, wrote down the value of their investment in the start-up earlier this year.

These start-ups are burning through cash to compete as the competition in the Indian online retail market is very stiff. Amazon will be hoping its latest investment will allow it to take advantage of that. This is evidenced by the market share of the three major players in market. While Snapdeal comes in with 26 percent and Amazon with 12 percent of the market share measured in terms of gross merchandise value (GMV) – a key metric for online retailers, the market leader is Flipkart which has a 45 percent market share.

In a market where many people don’t have bank accounts, infrastructure is not as well developed and internet can be patchy, the key to success is localizing the business efforts and that is exactly what Amazon has been trying to do in India.

“We’re adapting to the local model,” Bezos said at the Code Conference last week. In what is a different model than in the U.S. where it relies on third-party services, Amazon does its own deliveries in India, Bezos added.

(Adapted from CNBC)