“Not at all,” he told ET when asked if his statement would send a wrong signal to global investors. India welcomes, values and respects foreign investment, he added.
A day after Amazon CEO Jeff Bezos had announced a $1billion investment to digitise small Indian businesses last week, Goyal said the US company was not doing India a favour and that it was doing the investment to primarily fund its losses.
Amazon has said it wants to create one million new jobs in India by 2025. Speaking to ET before he leaves for Davos for the World Economic Forum’s summit, Goyal said many people are talking about jobs. “But I still look at the jobs from the perspective of jobs lost also,” he said.
“So, I cannot create 700,000 jobs by breaking the law, breaking every anti-competitive restriction, monopolising certain markets, causing millions of jobs to be potentially lost, incurring huge losses which I am bound to of course finance, and bring in foreign direct investment (FDI) and then claiming that I have a right.”
Citing the example of mobile stores that have closed down, Goyal said the ecommerce majors must talk about the impact their businesses have on small retail and on retailers whose whole capital may be about a few lakh rupees.
‘Big Cos Expected to Respect Law of Land’
“Can you imagine (companies) that are worth Rs 70 lakh crore, with deep pockets at almost zero-cost capital competing with small retailers who pay interest in double digits to the banks and are still trying to make a livelihood for their families?”
The minister restated that it is expected that large companies will respect the law of land.
Overseas-funded ecommerce marketplaces can’t engage in retailing goods themselves and can only function as platforms for buyers and sellers. Small shopkeepers accuse Amazon and Walmart-owned Flipkart of breaking the rules and driving them out of business through predatory discounts, prompting the government to tighten norms and increase oversight.
“It is a very clearly stated legal position. Now, if anybody in the garb of B2B creates associated companies, related parties, tries to find loopholes within the law through flash sales or through circumventing the restriction on B2C- through innovative structures, I certainly think it’s my duty to point that out to them,” Goyal said, urging all stakeholders to study the entire issue in the right perspective of the law of the land.
The Competition Commission of India (CCI) recently ordered a probe against Amazon and Flipkart for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.
3 Comments on this Story
Sadananda Halageri359 days ago
He is sounding dogmatic. Deep changes in the global economy and financial markets cannot be wished away. You have to adapt, whether you are big or small or a government owned business. Accept what you cannot change.
Satish Jay361 days ago
he has got a point there but not sure what he wants to convey via this message!
Tulsiram361 days ago
Dear Sir, with your logic, the end customer will always be at the mercy of retail chain and profit mongering middle men/layers.... take a classic example of flat panel TVs.. compare any decent brands LED TV prices in India vs any developed nation. Indian customer ends up paying 3 to 4 times higher price. there are at least 4 layers between TV manufacturer and Indian customer... what values these layers are adding?... the e-commerce companies are helping for reducing layers.. it reduces price and can generate more demand and move the economy.. why don't you comment on that?... now there should be more competition to Amazon so that tomorrow they won't have monopoly but this competition should be more e-commerce companies but certainly not small retail and trader unions pressurizing government hammering down every business strategy of these multinational companies to capture the market... Time has come for middle men to add value!