Commerce and Industry Minister Piyush Goyal calls for a review of policies to ensure that small shops are not affected because of the rapid growth of online commerce
On Wednesday, Commerce and Industry Minister Piyush Goyal called out e-commerce giants, particularly Amazon, for indulging in predatory pricing that poses a threat to the country’s traditional retail sector. Goyal stated that the sector’s rapid expansion could cause significant social disruption and is a cause for concern rather than celebration.
Breaking News: Commerce Minister accuses Amazon
Piyush Goyal was speaking at an event organized to mark the growth of e-commerce in India when he alleged that Amazon was passing off fund infusions to write off losses as investments into the country. He stated, “The country celebrates when firms such as Amazon announce investments worth billions of dollars. However, these investments are not coming to support the Indian economy,”. Amazon had reported ₹6,000 crore loss in India last year, addressing which Goyal stated, “If you make a ₹6,000-crore loss in one year, does that not smell like predatory pricing to any of you?” He further criticized E-commerce Stores for indulging in Predatory Pricing causing social disruptions. Goyal pointed out how these Unfair Pricing strategies are designed to eliminate competition. He also identified how the online delivery culture supports a broader social implication of the unregulated delivery of drugs to minors. While at it Piyush Goyal also mentioned how Amazon’s much-publicised billion-dollar investment in India might be less about supporting the Indian economy and more about covering these losses.
E-commerce Giants and how they exploit regulatory loopholes
The Indian law prohibits e-commerce platforms from engaging in direct business-to-consumer (B2C) transactions. However, E-commerce Stores like Amazon, structure their operations to skirt these rules. Goyal explained this practice stating, “They create entities where Indians contribute to making these entities. Then they get caught and start closing those entities, only to re-route the business through another entity to show it as B2B,”. He emphasized how practices like these allow Amazon to mask its true operations and continue dominating the consumer market in India.
Piyush Goyal earlier stance on E-commerce Giants
In 2021, Goyal lashed out at these E-commerce Giants accusing them of using their scale and access to large pools of low-cost capital “to the detriment of mom-and-pop stores” and that they “very blatantly flouted” laws. A 2021 Reuters investigative report revealed that Amazon’s internal files indicated how it assisted a select group of vendors to thrive on its Indian platform, providing them with reduced fees and enabling them to circumvent foreign investment regulations. Addressing the situation Amazon assured that it adhered to local laws and denied giving preferential treatment to any seller. However, it later came out that two of Amazon’s major vendors involved in these claims would stop selling products on its platform.
Breaking News: The counterargument of the accused
When asked about Goyal’s views, Amazon said, “We do not have a comment on this development as of now,”
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