New Delhi: Union Commerce and Industry Minister Piyush Goyal has said Amazon and Flipkart are “not doing a great favour” by investing billions of dollars in India.
Speaking at the Raisina Dialogue in the capital Thursday, Goyal said: “They (Amazon and Flipkart) may have put in billions of dollars here, but if they make a loss, then they jolly well will have to finance that billions of dollars. It’s not as if they are doing a great favour to India by investing a billion dollars here. They have been investing for years here now in warehousing and financing their loss.”
Goyal also referred to the probe initiated by fair trade regulator Competition Commission of India (CCI) into the e-commerce giants earlier this week, saying this is being done to investigate their business practices.
The minister also took a dig at Amazon boss Jeff Bezos, saying global e-commerce players are allowed to do business in India purely on the marketplace model, which is an “agnostic platform”. In the marketplace model, foreign e-commerce players are not allowed to have their own inventory and determine prices of the products, nor have any preferred seller.
The CCI probe is looking into Amazon and Flipkart’s alleged violation of business norms by way of deep discounts and preferred sellers on their portals. Goyal asked the firms not to break the law or “find loopholes in the law”.
Reiterating the government’s stance on multi-brand retail trade, where 49 per cent Foreign Direct Investment (FDI) is allowed, Goyal said: “We have strict rules in FDI multi-brand retail… Anybody who tries to use the marketplace model and surreptitiously get into FDI in multi-brand retail will have to questioned and investigated.”
Also read: Indian protests & probe against Amazon: Right message to investors in a slowing economy?
Timing is significant
Goyal’s remarks are especially important because Bezos is currently on a visit to India.
Just the previous day, Bezos announced he would invest $1 billion to promote Indian small and medium enterprises (SMEs) within Amazon’s platforms. He said this would help about 10 million Indian SMEs, and “create $10 billion in Indian exports by 2025”. However, hundreds of traders protested on the streets of Delhi, holding placards that said “Amazon Go Back”.
Walked out of RCEP due to China, says Goyal
On the issue of India walking out of the ASEAN-led mega trade pact, the Regional Comprehensive Economic Partnership (RCEP), Goyal said it was “not among equals”.
“We had China in the room; we have serious concerns with their trade practices and their trade ecosystem… We weren’t able to get much access for our services,” he said, adding that India joining the RCEP may have been a “good diplomatic move” but not when it came to trade.
India joined the RCEP talks in 2012. However, in November last year, Prime Minister Narendra Modi walked out of the talks, citing concerns over not getting what India demanded.
Also read: ‘With or without India’: 15 member countries decide to sign RCEP on 13 March
This is the way our senior ministers responding the richest man from the GLOBE. Great! In the next quarter our economy will bounce back! Thanks to the minister and his government.
Piyush goyal murdabad. Amazon Flipkart zindabad
True, they are not the Bill and Melinda Gates Foundation. They represent economic power in a globalised world. Walmart played an invaluable role in assisting the rise of China as a manufacturing cum export powerhouse. Perhaps Amazon can be of use to India. Somehow one finds all this talk of Red carpet, not red tape a little unreal. A Joint Secretary keeping Ratan Tata waiting for half an hour to meet him is more like our style. Each person rich and smart enough to be in Davos knows this fact of life when they deal with India.
Hello Mr.Frog-in-the -Well minister, We the middle class people consider Amazon and Flipkart as a favour to us. We get quality products at low prices. We are not short changed, as the Indian traders always do. Work for middle class also. Don’t work only for business-class people. Hitherto, I had better opinion about you. I even thought that you might make a better FM than the present incumbent who acts like Her Highness.
Every BJP Minister tries to project a tough image by using rough language. Everyone knows that the laws have to be obeyed and people like Amazon and Walmart do not come in with eyes closed. Goyal doesn’t have to lecture Bezos on how to finance losses since Amazon has done that for years in a tough market. If there is genuine violation of law, the Govt may certainly take action. There is no need to grandstand to curry favour with the Pm as Goyal has done. Firm action with diplomatic language would be preferential , otherwise such tough postures will drive future investors away.
This Chartered Accountant know nothing about commerce and business… With this attitude is he inviting foreign companies to invest in India.
He is playing to the gallery full of traders ,z shopkeepers and middleman.
Mr Goyal is merely preparing the pitch for Mukeshbhai to come and bat; he is merely the groundsman. If Modi-Shah can thwart Amazon & Walmart, then Mukeshbhai will saves billions in his soon to be launched JioMart venture.