New Delhi, Jan 17 (IANS): Union Commerce Minister Piyush Goyal said on Thursday that e-commerce firm Amazon was not doing "India a great favour" by investing $1 billion in the country.
Goyal was speaking at the Raisina Dialogue which is a multilateral conference held annually in New Delhi.
He said India allows e-commerce companies to work on the marketplace model where buyers and sellers are free to buy and sell and follow the rules of the marketplace and laws of the country, which clearly say that FDI in multi-brand retail will only be allowed up to 49 per cent.
"... Secondly, they may have put in a billion dollars but then, if they make a loss of a billion dollars every year, they will jolly well have to finance that billion dollars," he replied to a question during a panel discussion at the event.
"So, it is not as if they are doing a great favour to India when they invest a billion dollars," he said.
According to the minister, the company has been investing in India over the last few years, in warehousing and certain other activities.
However, the minister wondered as to how a company employing the e-commerce market-place model makes massive losses.
He said that such losses raise questions, whether the company is indulging in predatory pricing or other unfair trade practices, which will be investigated by authorities.
The minister's statement assumes significance since Amazon's global CEO Jeff Bezos on Thursday announced a $1 billion worth of investment into India.
The e-commerce firm's global CEO is on a three-day visit to India. On Thursday, he announced an investment of $1 billion in small and medium businesses in India.
Bezos also announced that the e-commerce major, through its global footprint, will help SMBs export products worth $10 billion by 2025.
The Amazon CEO's India visit comes at a crucial time as the Competition Commission of India (CCI) has ordered an enquiry into the business practices of e-commerce majors Amazon and Flipkart.
Traders have staged protests across India against Bezos' visit under the aegis of Confederation of All India Traders (CAIT). CAIT has been protesting for the past few months against what it calls "deep" discounts offered by the e-commerce platforms.
After the minister's statement at the Raisina Dialogue, CAIT termed it as bold and pragmatic.
"CAIT in its submission to the government has been maintaining that Amazon and Flipkart are bringing FDI in India only to fund their losses arising out of deep discounting and predatory pricing, which is a direct attempt to destroy the ecosystem of Indian retail by trampling upon the livelihood of seven crore traders," CAIT said in a statement.