Commerce and Industry Minister Piyush Goyal on Wednesday questioned Amazon’s announcement of investing $1 billion in India, saying that the American retailer is not doing any great service to the Indian economy, but is compensating for the losses incurred in the country. He said that the company’s compensating for the losses incurred abroad smells. This is not good for the country, because it affects crores of small retail sellers.
Presenting a report on ‘Net impact of e-commerce on employment and consumer welfare in India’, the minister criticized e-commerce companies and questioned their business model, which is affecting small retailers in the country. The report said that while Amazon’s one billion dollar investment is not to support the Indian economy, the company has incurred a loss of one billion dollars in its balance sheet, due to which it is investing so much to compensate.
How did Amazon incur this loss?
Piyush Goyal further said that how did Amazon incur this loss? They paid Rs 1,000 crore to professionals. I don’t know who these professionals are… I would love to know which chartered accountants, professionals or lawyers get Rs 1,000 crore, unless you pay all the top lawyers to stop them so that no one can fight a case against you.
Amazon is doing this work without permission
He said that if you incur a loss of Rs 6,000 crore in a year, don’t you think it is happening due to keeping very low prices. They are just an e-commerce platform and those companies are not allowed to do B2C (business to consumer) business. According to the policy, e-commerce platforms cannot legally do B2C in the country. The minister alleged that these companies create a unit by showing only B2B. This should be a matter of concern for us.
E-commerce companies are eliminating retail stores
The minister said that the e-commerce sector has a role to play, but this role has to be understood and thought about very carefully and cautiously. He also said that e-commerce companies are eliminating high-priced, high-margin products of small retailers, which are the only thing through which small and pop stores survive. Apart from this, he said that the impact of cloud kitchens on restaurants and people buying food products online has to be seen.
Concerns were also raised about online pharmacies
The minister also expressed concern over online pharmacies, saying, “Online, you can order whatever you want… this is a matter of concern.” “How many mobile stores do you see around the corner and how many were there 10 years ago? Where are all those mobile stores? Will only Apple or big retailers sell mobile phones and their accessories?” he said, adding that India is not a developed country with high per capita income like the US and Switzerland and a large section of people here need affirmative action and help.
Last year, Amazon had talked about plans to invest another $15 billion in India, taking its total investments in the country to $26 billion. After meeting Prime Minister Narendra Modi during his visit to the US in 2023, Amazon CEO Andy Jassy said, “I had a very good and productive conversation with Prime Minister Modi. I think we will share many goals. Amazon is one of the largest investors in India. We have invested $11 billion so far and intend to invest further.”
Source (PTI) (NDTV) (HINDUSTANTIMES)