'Its no way a favour', Piyush Goyal marks straight over Amazon's Jeff Bezos $1 billion investment to India
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New Delhi, January 17: "Amazon is not doing a favour to India by investments", said Piyush Goyal on Thursday questioning how the online retailing major could incur such big losses but for its predatory pricing. This is a day after Amazon's Jeff Bezos announced fresh $1 billion investment in India.
Goyal, who has not yet given Bezos an audience, said e-commerce companies have to follow Indian rules in letter and spirit and not find loopholes to make a back-door entry into multi-brand retail segment. India does not allow foreign investment beyond 49 per cent in multi-brand retailing and has not yet approved any application of overseas retailers.
"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," he said at the Raisina Dialogue here.
Attended The @RaisinaDialogue 2020 and spoke about India's vision of a reformed multilateral rule-based trading system, which balances domestic interests and negotiates with countries in a fair and equitable manner.https://t.co/W4EPae3Nv9 pic.twitter.com/Y6l0cgQWoP
— Piyush Goyal (@PiyushGoyal) January 16, 2020
The USD 1 billion investment by Amazon.com to help bring small and medium businesses online is on the top of USD 5.5 billion funding it had previously announced. The minister further wondered why an e-commerce market place model, where a firm provides an IT platform for buyers and sellers, incurring huge losses adding that it needs to be looked upon.
Going forward, we will have to make trade policies more and more people-centric, which look at sustainability, elimination of poverty and bringing up level of prosperity in the less developed world. pic.twitter.com/aIORAZKWT6
— Piyush Goyal (@PiyushGoyal) January 16, 2020
"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 $10 billion dollars, if a company is incurring loss of billion dollars, it "certainly raises questions, where the loss came from".
I am very optimistic and confident that all that we see today is only going to be better for multilateralism.
— Piyush Goyal (@PiyushGoyal) January 16, 2020
As PM @NarendraModi ji rightly put it, "Reformed Multilateralism is what this world is looking for." pic.twitter.com/KmMzYcbyTg
Recently the fair trade regulator Competition Commission of India ordered a probe against e-commerce majors Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms. "CCI based on its preliminary findings has already initiated an enquiry into the practices of Amazon and Flipkart. And that is certainly an area of concern for every Indian," he noted.
Meanwhile the Confederation of All India Traders hailed the bold and pragmatic statement given by the commerce minister. "With this stand, the minister has once again reiterated that the government is sensitive to the interests of seven crore traders who are severely affected by the malpractices of e-commerce giants," it said in a statement.