Amazon not doing any favour by investing $1 bn in India: Piyush Goyal
New Delhi, Jan 17 (KNN) Amazon is not doing any favour by investing one billion dollar in India, said Commerce & Industry Minister Piyush Goyal and questioned that how the online retailing major could incur such "big" losses if not for its predatory pricing.
His comment came at a time when Amazon’s Global CEO Jeff Bezos is on a visit to India.
Goyal said e-commerce companies have to follow Indian rules in letter and spirit and not find loopholes to make a back-door entry into the multi-brand retail segment.
India does not allow foreign investment beyond 49% in multi-brand retailing and is yet to approve any application of overseas retailers.
"They (Amazon) may have put in a billion dollars, but if they make a loss of a billion dollars every year, then jolly well will have to finance that billion dollar. So, it is not as if they are doing a favour to India when they invest a billion dollars," Goyal said at the Raisina Dialogue here.
Amazon CEO this week announced USD 1 billion investment by to help bring Indian MSMEs online. This is on top of the USD 5.5 billion funding it had previously announced.
Goyal wondered why an e-commerce market place model, where a firm provides an IT platform for buyers and sellers, incurred huge losses, adding it needs to be looked at.
"They are investing money over the last few years also in warehousing and certain other activities, which is welcome and good. But if they are bringing in money largely to finance losses and those losses in an e-commerce market place model," Goyal said.
He added that in a fair market place model in a turnover of USD 10 billion dollars, if a company is incurring a loss of a billion dollars, it "certainly raises questions where the loss came from".
Goyal asked how a marketplace can make such a big loss unless they are indulging in "predatory pricing or some unfair trade practices".
"These are real questions which need answers and I am sure the authorities who are looking at it seek those answers and I am sure the e-commerce companies will have their say on that," he said.
Goyal is unlikely to meet Bezos during his two-day visit to India. Amazon has come under investigations on multiple counts, including deep discounts and exclusive tie-up with preferred sellers, here.
The company had faced similar investigations in the European Union and the US.
The Competition Commission of India (CCI) had on Monday ordered an inquiry into the operations of both Amazon and Flipkart on multiple counts, including deep discounts and exclusive tie-up with preferred sellers.
Finding merit in the allegations levelled by traders' body Delhi Vyapar Mahasangh, the commission asked its director general (DG) to complete the investigation in 60 days from the receipt of the order.
The traders’ apex body in India Confederation of All India Traders (CAIT) has been protesting against “predatory pricing” by the online giant. They had made representations and held several protests against the online platforms alleging unfair trade practices.
Traders across 300 cities of the country held protests under the aegis of CAIT during Bezos' visit.
Speaking at a company event in New Delhi, Bezos said he feels the 21st century is “going to be the Indian century.” He also confirmed the company will export $10 billion worth of Make in India goods by 2025.
Bezos was in India for a two-day event being organised by Amazon for small and medium businesses.
The event kicked-off in Delhi where he met key leaders and policymakers, as well as Prime Minister Narendra Modi.