Amazon’s Billion-Dollar Investment In India Not A Favour, Piyush Goyal Says
A day after Jeff Bezos said Amazon.com Inc. will invest $1 billion more in India to help small businesses go online, the nation’s commerce minister said the retail giant was not doing a favour.
“Amazon may have put in a billion dollars but if they are making a loss of a billion dollars every year, then they will have to finance it,” Piyush Goyal, in charge of the commerce ministry along with railways, said during a statement at Raisina Dialogue in New Delhi on Thursday. “It’s not that they are doing a favour to India when they invest that billion dollars.”
Investments in warehousing and other areas are welcome but if Amazon and others are making investments to largely finance the losses, it needs to be investigated, Goyal said. “How can a marketplace make such a big loss unless they are indulging in predatory pricing, some unfair trade practices? These are real questions that needs answers.”
Amazon’s India marketplace posted a loss of around Rs 5,685 crore in the financial year ended March 2019, narrowing from Rs 6,287 crore in the previous fiscal, its filings showed. The company attributed the losses to investments in infrastructure, opening new fulfillment centres, and technology.
Flipkart, along with subsidiaries Myntra and Jabong, and PhonePe payments platform, reported a cumulative loss of Rs 17,231 crore in the year ended March 2019, according to its Singapore filings.
The e-commerce sector in India, Amazon's most important overseas market, is projected to grow to $150 billion by 2022, according to a 2018 report by Nasscom and PwC India. But Bezos made his second visit to India in a starkly different circumstance.
India’s anti-trust regulator is probing Amazon and Walmart Inc.’s Flipkart over deep discounting, exclusive arrangements and preferential treatment to a few sellers. Traders too are protesting Bezos’ India visit, citing predatory practices by online retailers.
Goyal warned that India’s marketplace rules don’t allow control over inventory and prices, and they can’t get into multi-brand retail—India doesn’t allow foreign direct investment in the sector. “Anybody who tries to use e-commerce marketplace model to get into the multi-brand retail, surreptitiously, will have to be questioned and investigated,” he said.