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Jeff Bezos $1 billion investment in India not a favour, says Piyush Goyal

Piyush Goyal welcomed Amazon’s investments in warehousing and other activities (Ramesh Pathania/Mint)Premium
Piyush Goyal welcomed Amazon’s investments in warehousing and other activities (Ramesh Pathania/Mint)

  • Piyush Goyal’s statement came a day after Amazon founder Jeff Bezos, currently on a three-day visit to India, pledged $1 billion in new investments
  • CCI’s probe into Amazon and Flipkart, based on initial findings, is ‘an area of concern for every Indian’, said Piyush Goyal

NEW DELHI : Trade minister Piyush Goyal on Thursday questioned the reason behind the losses that e-commerce giant Amazon is making in India, holding that its announcement to invest $1 billion in India is not a favour to the country.

Goyal’s statement came a day after Amazon founder Jeff Bezos, currently on a three-day visit to India, pledged $1 billion in new investments to help take 10 million small Indian businesses online.

“They may have put in a billion dollars, but if they make a loss of a billion dollars every year, then jolly well they have to finance that billion dollars. So, it’s not as if they are doing a great favour to India when they invest a billion dollars," Goyal said at the Raisina Dialogue.

Amazon Seller Services, the online marketplace arm of the e-commerce giant in India, made a loss of 5,685 crore in 2018-19, narrowing losses from the previous year by 9.5%, according to documents sourced by business intelligence platform Tofler.

Goyal welcomed Amazon’s investments in warehousing and other activities, simultaneously questioning how a marketplace could make such a big loss unless it was indulging in predatory pricing or some unfair trade practices. “If they are bringing in money largely to finance losses in an e-commerce marketplace model, it certainly raises questions where the loss came from. These are real questions, which need answers and I am sure the authorities who are looking at it will seek those answers and I am sure the e-commerce companies will have their say on that."

The Competition Commission of India (CCI) on Monday ordered a probe into alleged competition law violations by Amazon and Walmart-owned Flipkart over allegations that the e-commerce majors promoted and gave discounts to “preferred" sellers, entered into exclusive partnerships with smartphone brands and abused their dominant position. The antitrust body said exclusive arrangements between mobile phone brands and e-commerce platforms selling exclusively on either of the platforms merit an investigation.

Goyal said the enquiry ordered by CCI based on preliminary findings is “an area of concern for every Indian".

“We did allow e-commerce entities to come into India in the marketplace model, which is an agnostic platform where buyers and sellers are free to trade," he said. “The marketplace cannot own the inventory, cannot have control over the inventory, cannot determine prices, cannot have algorithms to determine which product will get a pre-eminent position or would be given a market preference when offered to the buyers. As long as everybody follows those rules, we very much welcome e-commerce into India and they are happy to come and serve the people of India."

Goyal said there are strict rules about FDI in multi-brand retail and anybody, who tries to use the e-commerce marketplace model to get into the multi-brand retail space surreptitiously, will have to be questioned and investigated. “Whether they are doing it or not, it is for the investigators to decide. It is not my call. Whatever will be their findings should be respected by everybody."

Answering a question about rising trade tensions with Malaysia and Turkey, Goyal said India has neither put any curbs on imports from these countries nor is it contemplating to do so.

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