Remarks on Amazon won't send wrong signal to investors: Piyush Goyal

NEW DELHI: Commerce and industry minister Piyush Goyal said promises of job creation by foreign-owned ecommerce companies need to be seen from the perspective of potential job losses as well, adding his remarks on Amazon will not send a wrong signal to international investors.

“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.