A day after expressing concerns about the rapid growth of e-commerce in India, Union Minister of Commerce and Industry, Piyush Goyal, clarified on August 22 that the government is not against e-commerce.
He said that the government aims to ensure that small retailers have a ‘fair chance’ to compete in the market. Goyal made this statement in an effort to address the confusion surrounding his earlier remarks.
The Union Minister said that the government is keen on inviting foreign direct investment (FDI) and embracing new technologies, including the online marketplace.
“We want to invite FDI. We want to invite technology. We want to have the best of the world… We are not against online at all. We want to invite online and serve you,” Goyal said, reaffirming the government’s stance.
While acknowledging the advantages of e-commerce, such as the convenience of doorstep deliveries and the speed of transactions, Goyal mentioned that the government is focused on ensuring “fair competition and legal compliance.”
He highlighted the need to support small retailers, who might struggle to compete against large online platforms if left unchecked.
“What the government wants is fair play and honesty and ensure our people have a fair chance to compete against such online business,” he added.
Goyal’s comments came a day after the release of a report titled ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India,’ where he had raised concerns about the business practices of large e-commerce players like Amazon.
At the event, he pointed out that Amazon’s billion-dollar investments in India might not be as beneficial as they appear on the surface.
“When Amazon says we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that these billion dollars is not coming for any great service or investment to support the Indian economy. They made a billion-dollar loss in their balance sheet that year, and they had to fill in that loss,” Goyal said.
The minister linked these losses to the practice of predatory pricing, where prices are set so low that they drive competitors out of the market. This, according to Goyal, is a tactic that threatens the survival of small retailers who cannot match such pricing strategies.
Goyal’s clarification indicates the government’s commitment to balancing the interests of both e-commerce giants and small traders, ensuring that the latter are not left behind in India’s rapidly evolving marketplace.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
