A Akhter / NEW DELHI
Soon after the world’s richest person Jeff Bezos announced fresh $1 billion investment in India, Union Commerce and Industry Minister Piyush Goyal on Thursday said his firm Amazon was not doing a favour to the country by the investments.
He even questioned how the online retailing major could incur such “big” losses but for its predatory pricing.
Speaking at Raisina Dialogue here the minister said firms need to explain how they incur these losses in a marketplace model “unless they are indulging in predatory pricing or some unfair practices”.
Goyal also mentioned the ongoing inquiry ordered by the Competition Commission of India (CCI) into the practices of Amazon and Flipkart, the two largest e-commerce players in India, and said companies are free to run their businesses in India as long as they follow rules.
“We have very strict rules about FDI (foreign direct investment) in multibrand retail, where only 49 per cent is allowed, and anybody who tries to use the e-commerce marketplace model to get into the multibrand retail space surreptitiously will have to be questioned and will have to be investigated,” he said, adding that e-commerce firms should follow the “letter of the law and the spirit of the law’.
Goyal, who has not given Bezos an audience, said India does not allow foreign investment beyond 49 per cent in multi-brand retailing and has not yet approved 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,” Minister said at the Raisina Dialogue here.
The USD 1 billion investment by Amazon.Com to help bring small and medium businesses online is on the top of $5.5 billion funding it had previously announced.
The minister 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.
“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.
Bezos, considered the richest man in the world with a net worth of $117 billion, is in India for the first edition of his firm’s micro, small and medium enterprises focused event — Amazon Smbhav. In New Delhi, he announced the investment of $1 billion, in addition to the $5 billion Amazon has invested over the past five years.
The latest round of investment will go towards digitising 10 million MSME businesses in India, and help such firms export $10 billion worth of “Make in India” goods by 2025 through its platform.
Commerce and Industry Minister stated that it is the right time now to make trade policies that are people centric to be sustainable, to eliminate poverty and raise prosperity levels for all citizens.
Piyush Goyal informed that India has not imposed any curbs on imports from either Malaysia or Turkey or any other country and it believes in fair play and equal terms for all trading partners and if curbs are imposed,they apply to all countries.
Minister clarified that one out of four items valued at USD 130 billion are in the ‘others’ category. Right classification of these imports under HSN code will only lead to greater transparency and establish fair trading practices and make India a fair place to do business and trade and also provide equal opportunity to all.
Piyush Goyal informed that India has not imposed any curbs on imports from either Malaysia or Turkey or any other country and it believes in fair play and equal terms for all trading partners and if curbs are imposed,they apply to all countries.
On the issue of the import of goods in the ‘others’ category, the Commerce and Industry Minister clarified that one out of four items valued at USD 130 billion are in the ‘others’ category. Right classification of these imports under HSN code will only lead to greater transparency and establish fair trading practices and make India a fair place to do business and trade and also provide equal opportunity to all.