India’s trade minister isn’t impressed with Amazon’s new $1 billion investment in the country.
A day after Amazon chief executive Jeff Bezos announced that his company is pumping in an additional $1 billion into its India operations, making the total local investment to date $6.5 billion, the nation’s trade minister Piyush Goyal said Amazon’s investment was not a big favor to the country.
“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,” Goyal said in a conference on Thursday organized by think tank Observer Research Foundation. “So it’s not as if they are doing a great favor to India when they invest a billion dollars.”
The remark from the Indian minister comes days after the nation’s antitrust watchdog announced a probe into Amazon India and Walmart-owned Flipkart’s alleged predatory practices.
Bezos, who is in India this week, has sought to meet with India’s Prime Minister Narendra Modi, but his request has yet to be approved, a person familiar with the matter told TechCrunch.
Goyal reiterated that foreign e-commerce players would have to abide by the local law if they want to continue to operate in the nation. He said the watchdog’s allegations were “an area of concern for every Indian.”
“We allowed every entity to come to India in a marketplace model. A marketplace model is an agnostic model where buyers and sellers are free to trade. If they establish an agreement, then the transaction is between the buyer and seller. The marketplace cannot own the inventory, cannot have control over the inventory, cannot determine prices, and cannot have an algorithm that influences how products from different sellers are listed on the platform,” he added.
“We have several rules for marketplaces in India. As long as one follows them, they are free to operate in India,” he said. Some of the allegations that are being investigated in India surround the alleged violation of these very aforementioned guidelines.
Goyal’s comments may further escalate the tension between Amazon and the Indian government. Last year, U.S. senators criticized New Delhi after it restricted foreign companies from selling inventory from their own subsidiaries. The move forced Amazon and Flipkart to abruptly pull hundreds of thousands of goods from their marketplaces.
Source: New feed