While the media was going Gaga over Jeff Bezos’ kite flying, his so-called billion dollar “incremental” investment into Indian SMEs and his “Indian Century” phrases, union cabinet minister for trade, Piyush Goyal, has played it all down. In a conference in New Delhi, Goyal said that Amazon’s announcements are no big favour to India, and that the company’s mounting losses are a reason for such investments.
“They may have put in a billion dollars but then if they make a loss of a billion dollars every year then they jolly well have to finance that billion dollars,” said Piyush Goyal at a conference organized by think tank Observer Research Foundation in New Delhi. “So it’s not as if they are doing a great favour to India when they invest a billion dollars”, he added. The conference, called ‘Raisina Dialogue 2020′ is an annual conference organised to have global leaders discuss issues of global and strategic importance.
Bezos has also requested a meeting with Prime Minister Narendra Modi, but is yet to get an approval for the same. This, coupled with Goyal’s statement clearly highlight the strained relation that Amazon as well as Walmart currently share with the central government.
Jeff Bezos’ India visit comes at a time when his company is facing all sorts of troubles in the country. At one end, there are proposed government regulations, which when fully implemented, will mean a complete change of business model for both Amazon and Walmart-owned Flipkart, if they wish to continue doing business. Then specifically for Amazon, are mounting protests from sellers listed on its platform. The reasons for these protests range from commissions to deep discounting of selected products among others.
To top this all is a recent investigation initiated by the competition watchdog. The Competition Commission of India has reportedly begun investigating both Amazon and Flipkart for anti-competitive practices.
The issues highlighted by CCI includes the arrangements between smartphone vendors and e-commerce platforms to sell certain handsets exclusively online, and e-commerce firms apparently giving preferential treatment to certain sellers.
The CCI has also ordered the director general to investigate whether these two online retailers are offering deep discounts on their marketplaces and promoting their own private labels.