Hyderabad:E-commerce giant Amazon's chief executive and world's richest person Jeff Bezos on Friday concluded his three-day India visit. During his visit, he announced USD 1 billion (over Rs 7,000 crore) investment plan and said that the company is also planning to create one million new jobs in India over the next five years.
However, the announcement did not please the Union Commerce Minister Piyush Goyal as he said Amazon was not doing a favour to the country by the investments and questioned how the online retailing major could incur such "big" losses but for its predatory pricing.
Union Commerce Minister Piyush Goyal on e-commerce rules in India "They (Amazon) may have put in a billion dollars but if they make a loss of a billion dollars every year, then jolly well will have to finance that billion dollar. So, it is not as if they are doing a favour to India when they invest a billion dollars," he said.
The minister wondered why an e-commerce market place model, where a firm provides an IT platform for buyers and sellers, incurring huge losses adding that it needs to be looked upon.
"They are investing money over the last few years also in warehousing and certain other activities, which is welcome and good. But if they are bringing in money largely to finance losses and those losses in an e-commerce market place model," Goyal said.
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He added that in a fair market place model in a turnover of USD 10 billion dollars if a company is incurring loss of billion dollars, it "certainly raises questions, where the loss came from".
Goyal said that how can a marketplace make such a big loss unless they are indulging in "predatory pricing or some unfair trade practices".
"These are real questions which need answers and I am sure the authorities who are looking at it seek those answers and I am sure the e-commerce companies will have their say on that," he said.
The minister added that India allows foreign investments in e-commerce market place model and in this model buyers and sellers are free to trade, but the market place player cannot own the inventory, or they can not determine prices.
There are several established market rules for an e-commerce market place business in India and "I think as long as everybody follows these rules, we very much welcome e-commerce into India," he added.
Further, he said that India has strict rules for FDI in multi-brand retail trading and anybody who tries to use the e-commerce market place model to get into the multi-brand retail space surreptitiously will have to be questioned and investigated.
"Whether they are doing that or not is a matter of the investigators to decide...whatever (would be their) findings, that should be respected by everybody," Goyal said.
He reiterated that investors have to follow the laws in letter and spirit and do not try to find loopholes within the defined letter of the law.
