Commerce and Industry Minister Piyush Goyal.
Credit: PTI File Photo
New Delhi: Nearly a half of India’s market may become a part of the e-commerce network in 10 years from now, but it is a matter of concern rather than an achievement since predatory pricing policies of global giants like Amazon and Flipkart impact employment and local businesses, Commerce and Industry Minister Piyush Goyal said on Wednesday.
“When Amazon says that we are going to invest a billion dollars in India, we all celebrate but we forget the underlying story that billion dollars is not coming in for any great service or any great investment to support the Indian economy,” the minister said.
“They made a billion-dollar loss in their balance sheet that year. They have to fill in that loss,” said Goyal, suggesting that the investments made by the global e-commerce giants are to cover losses rather than contribute to India’s economic growth.
After meeting Prime Minister Narendra Modi during his visit to the United States in June 2023, Amazon CEO Andy Jassy announced that the company would increase its investment in India to $26 billion by 2030 from $11 billion made till 2023.
While such investment announcements by e-commerce giants make good headlines and are presented as achievements by the government, Goyal said it can’t be seen as a reason to celebrate if such investments come for covering up the losses.
The minister further added that such losses shown on the balance sheets of the e-commerce firms indicate their “predatory pricing” policies, which are not good for the country as they impact crores of small businesses.
Amazon and Walmart-owned Flipkart dominate the Indian e-commerce business. Both these firms reported close to Rs 5,000 crore losses each from their India operations during the financial year
2022-23.
Goyal wondered how come these companies, which are just e-commerce platforms, are making such huge losses. “And how did that loss get caused? They paid Rs 1,000 crore to professionals – I don’t know who these professionals are. I am a chartered accountant, I have done law. I would love to know which CAs, professionals, lawyers get Rs 1,000 crore. Unless you are paying all the top lawyers to block them so that nobody can fight a case against you,” he said.
“If you make Rs 6,000 crore loss in one year, does that not smell of predatory pricing to any of you?,” Goyal asked while addressing an event organised by Pahle India Foundation.
Goyal alleged that the e-commerce firms were involved in illegalities, in that they operate in the business-to-consumer space (B2C) but reroute through different entities to show that it is business-to-business (B2B).