Union Minister Piyush Goyal has been vocal about his discontent with online e-commerce companies recently. His concerns stem from the lack of full compliance with India’s foreign direct investment (FDI) laws by companies like Amazon. Goyal emphasized the need for consumers to consider who truly benefits from their purchases in the e-commerce landscape.
Goyal scrutinized Amazon’s recent $1 billion investment in India, stating that the American retailer is not contributing positively to the Indian economy but rather compensating for losses incurred abroad. This compensation, according to Goyal, could have detrimental effects on millions of small traders in the country. E-commerce platforms are increasingly displacing small retailers who rely on high-priced, high-margin products for survival, especially affecting small, local stores.
The impact of cloud kitchens on traditional restaurants and the shift towards online food product purchases further adds to Goyal’s concerns. Addressing a gathering of chartered accountants, Goyal highlighted a provision in Indian law that restricts foreign e-commerce companies to engage only in business-to-business transactions within the country, a regulation he believes has not been diligently followed.
Goyal criticized companies like Amazon for leveraging their financial power to manipulate market prices and consumer preferences through algorithms. He raised alarms about the escalating prices and potential social disruptions caused by the growing unemployment resulting from the decline of small shops.
While Goyal clarified that the government does not oppose e-commerce entities, he stressed the importance of fairness and transparency in their operations. The government aims to support online businesses that offer speed and convenience while upholding ethical standards.
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