'Not doing India a favour': Piyush Goyal on Amazon's $1 billion investment

Day After Jeff Bezos Pledges $1 Bn Investment Piyush Goyal Says Amazon Doing No Big Favour to India

The minister is reportedly not going to meet Amazon CEO Jeff Bezos, who is now visiting India.

Amazon chief Jeff Bezos, who arrived in India on Tuesday to meet senior government officials and business leaders, said on Wednesday that the e-commerce giant would invest $1 billion (over Rs 7,000 crore) to digitise small and medium businesses in India. "Anyone who uses ecommerce model to enter multi brand retail will have to be investigated", the minister said.

India does not allow foreign investment beyond 49% in multi-brand retailing and has not yet approved any application of overseas retailers.

As Bezos spoke to the Delhi summit, independent shop owners took to the streets with placards alleging that Amazon was already driving them out of business by drastically undercutting their prices and favouring large retailers.

Amazon's marketplace unit in India reported a loss of 56.85 billion rupees ($802 million) in the fiscal year ending March 2019, the Economic Times reported in October, citing filings on India's Registrar of Companies. He said the watchdog's allegations were "an area of concern for every Indian".

He added that in a fair marketplace 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".

"They may have put in a billion dollars but then if they make a loss of a billion dollars every year then they jolly well have to finance that billion dollars", trade minister Piyush Goyal told a security conference in New Delhi. In 2018, India introduced laws barring foreign-owned e-commerce businesses from selling their own inventory and requiring them to be neutral marketplaces, forcing companies such as Amazon to only sell third-party goods from independent sellers.

Goyal reiterated that foreign e-commerce players would have to abide by the local law if they want to continue to operate in the nation.

Amazon and Walmart's WMT.N Flipkart are facing mounting criticism from India's brick-and-mortar retailers, which accuse the USA giants of violating Indian law by racking up billions of dollars of losses to fund deep discounts and discriminating against small sellers.

"Whether they are doing that or not is a matter of the investigators to decide.whatever (would be their) findings, that should be respected by everybody", Goyal said.

"I have on more than one occasion, said this to the people of India and to all investors, that to please follow the letter of the law and the spirit of the law", he added.



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