India sneers at Amazon's US$1b investment as resentment grows
THE Indian government has scoffed at Amazon
THE Indian government has scoffed at Amazon.com founder Jeff Bezos' offer to invest US$1 billion in the country, firing the latest salvo at an e-commerce giant that's been accused of predatory business practices.
Trade minister Piyush Goyal delivered a stinging rebuke two days after Bezos arrived in New Delhi and touted his efforts to help digitise small and medium enterprises. The investment would bring Amazon's bet on the Indian market to about $6.5 billion. Mr Goyal told a gathering of foreign ministers from around the world he welcomed an investigation into the company's alleged 'predatory pricing and unfair trade practices'.
'They may have put in a billion dollars,' Mr Goyal said at the Raisina Dialogue in New Delhi. 'But then if they make a loss of a billion dollars every year, then they jolly well 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.'
Mr Bezos has attracted significant opposition during a tour of India intended to underscore its importance as a growth driver for Amazon. The country's antitrust regulator initiated a formal investigation hours before his arrival, and retailers affiliated with the Confederation of All India Traders organised sit-ins and public rallies in multiple cities to protest Amazon's traditional cut-price approach and exclusive-selling practices.
Outside the venue of Amazon India's annual event for small retailers, demonstrators held banners proclaiming 'Amazon, go back!' and with Mr Bezos' face crossed-out. The CEO has sought a meeting with Prime Minister Narendra Modi but that hasn't come through.
Mr Goyal's comments were an indication that Modi's government is trying to safeguard the interests of smaller Indian traders, the traditional voter base of his Bharatiya Janata Party, as elections approach in the state of Delhi, home to the country's capital.
The flare-up suggests India is turning increasingly hostile to the monopolistic practices of foreign e-commerce players that dominate the burgeoning market. Responding to widespread complaints, India restricted foreign direct investment in multi-brand retail and this has forced Amazon and Walmart Inc's Flipkart, the two biggest e-commerce players in India, to overhaul business models to comply with new rules introduced in December 2018, reports Bloomberg.
Mr Goyal also questioned why an e-commerce marketplace should make losses. 'Anybody who tries to use the e-commerce marketplace model to get into the multi-brand retail space surreptitiously will have to be questioned, will have to be investigated,' he said.