Union Commerce and Industry Minister said on Thursday that global e-commerce giant Amazon wasn’t doing India a favour by investing $1 billion in the country’s market. “It is not as if that they are doing a favour to India if they are investing a billion dollars,” Goyal said, replying to a question from an audience member at the Raisina Dialogue in New Delhi. Raisina Dialogue is an annual foreign policy conference jointly organised by the Ministry of External Affairs (MEA) and New Delhi-based think tank Observer Research Foundation (ORF).
“If they are investing money in India just to finance their losses, especially in an e-commerce model, where they are losing $1 billion on every $10 billion that they are investing, then it certainly raises questions,” the minister said.
“Where did the loss come from? How could a marketplace make such a big loss, unless they are indulging in unfair pricing and predatory trade practises?” he added.
Quoting from media reports that the Competition Commission of India (CCI) had initiated a probe into the business practises of Amazon, Goyal noted that the matter was of concern to every Indian.
They are being investigated and there will be answers soon, he said.
Amazon’s global CEO Jeff Bezos is on a three-day visit to India. On Thursday, he announced an investment of $1 billion in small and medium businesses in India.
Bezos also announced that the e-commerce major, through its global footprint, will help SMBs export products worth $10 billion by 2025.
The Amazon CEO’s India visit comes at a crucial time as the Competition Commission of India (CCI) has ordered an enquiry into the business practices of e-commerce majors Amazon and Flipkart.
Traders have staged protests across India against Bezos’ visit under the aegis of Confederation of All India Traders (CAIT). CAIT has been protesting for the past few months against what it calls “deep” discounts offered by the e-commerce platforms.
After the minister’s statement at the Raisina Dialogue, CAIT termed it as bold and pragmatic.
“CAIT in its submission to the government has been maintaining that Amazon and Flipkart are bringing FDI in India only to fund their losses arising out of deep discounting and predatory pricing, which is a direct attempt to destroy the ecosystem of Indian retail by trampling upon the livelihood of seven crore traders,” CAIT said in a statement.