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