Union minister Piyush Goyal took aim at Amazon’s “predatory pricing policies” while underscoring that the ecommerce major plans to invest billions of dollars in India only to offset its losses
The comments came days after Amazon CEO Andy Jassy said the company plans to invest another $15 Bn in India by 2030, which will bring the total to $26 Bn
Goyal said he is not “wishing ecommerce away”, but India has to think carefully and cautiously about its role
Union minister Piyush Goyal took aim at Amazon’s “predatory pricing policies” while underscoring that the ecommerce major plans to invest billions of dollars in India only to offset its losses.
“When Amazon says we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that this billion dollars is not coming for any great service or any great investment to support the Indian economy. They made a billion dollar loss in their balance sheet that year, they had to fill in that loss,” Goyal said.
Goyal made the remarks during an event in Delhi where a report on ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’ was released.
The comments came days after Amazon CEO Andy Jassy said the company has already invested $11 Bn in India till date and intends to invest another $15 Bn by 2030, which will bring the total to $26 Bn.
Goyal went on to say that Amazon’s predatory pricing tactics are to blame for its huge losses.
“If you make INR 6,000 Cr loss in one year, does that not smell of predatory pricing to any of you? What did that loss come on? They are, after all, an ecommerce platform, they are not allowed to do B2C. The ecommerce platform legally, cannot do business-to-consumer (B2C),” the minister said.
As per existing foreign direct investment (FDI) regulations, global ecommerce companies can operate independently as marketplaces but are restricted from operating in offline retail. Furthermore, as per the FDI policy, while 100% FDI under automatic route is allowed in business-to-business (B2B) ecommerce, no FDI is allowed in B2C ecommerce.
Meanwhile, FDI in multibrand retail is allowed up to 51% under the government approval route with the condition that at least 30% of the procurement of manufactured/processed goods shall be sourced from local partners.
“They [ecommerce platforms] create entities where Indians contribute to making those entities sadly. When they get caught, they start closing down those entities. But they only reroute all the business, through an entity to show that it’s (a) business to business (B2B) (transaction) but (the) reality is all of you buy on these platforms, don’t you? How do you buy? B2C is not allowed on these platforms. How are they doing it? Should this not be a matter of concern for all of us?,” Goyal asked.
While Goyal clarified that he does not “wish ecommerce away”, India has to think carefully and cautiously about its role in the country.
It is pertinent to note that Amazon has liquidated several of its Indian subsidiaries in the last two years. In 2022, Amazon shut Cloudtail following raids on the latter’s offices by antitrust watchdog the Competition Commission of India. A few months later, it also shuttered Appario Retail.
