All foreign investments must comply with the law of the country: Piyush Goyal in the Amazon line
AHMEDABAD: One day after declaring that Amazon I was not doing India a favor by investing one billion dollars, Minister of the Union Piyush Goyal On Friday, he said the country welcomes all kinds of investments that follow the letter and spirit of the law.
Goyal said that some people have misconstrued his remarks by suggesting that he had said something negative against Amazon .
It just said that the investment should be made according to the rules and regulations, Goyal said.
Large investments in retail space should not harm small merchants who do not have rupee thousands, Goyal, who was here to inaugurate the 'Ahmedabad Design Week', a three-day event for students of various designs and architecture institutes, he said.
We welcome all types of investments. However, the necessary legal process would follow if any investment is made outside the scope of the law, said the minister.
Our country has some rules for the e-commerce industry. We welcome all those investments that come in accordance with these rules. However, it should not create unfair competition for small traders in India. They do not get zero percent loans. They do not have thousands of rupees and millions of rupees. They do business with small capital, Goyal said.
The minister on Thursday said Amazon was not doing a favour to the country by investing a billion dollars and questioned how the online retailing major could incur such "big" losses but for its predatory pricing.
My statement should be viewed from a perspective, Goyal said here, adding that all countries accept foreign investment, but it must be within the framework of the law.
Our laws say that the interests of these small merchants should not be affected. The investment should be within the scope of the established parameters. That is my opinion and that of the government, he added.
If the investments are not within the framework of the law, then legal action would be initiated, he told reporters.
The minister in a tweet also expressed similar views.
We welcome all types of investments that follow the letter and spirit of the law. If any investment is outside the legal scope, appropriate measures will be taken. Our government wants to ensure that unfair competition is not created for millions of small merchants and retailers in the country, Goyal said in a tweet.
We welcome all types of investments that follow the letter and spirit of the law. If any investment is out of the legal ... https://t.co/DQipGCMJrm - Piyush Goyal (@PiyushGoyal) 1579254217000
Goyal has stated that e-commerce companies must follow the rules of India in letter and spirit and not find gaps to make an entry through the back door in the multi-brand retail segment.
India does not allow foreign investments beyond 49 percent in multi-brand retail sales and has not yet approved any requests from overseas retailers.
"They ( Amazon ) may have put in a billion dollars but if they make a loss of a billion dollars every year, then jolly well will have to finance that billion dollar. So, it is not as if they are doing a favour to India when they invest a billion dollars," Goyal said at the Raisina Dialogue in New Delhi on Thursday.
The $1 billion investment by Amazon .com to help bring small and medium businesses online is on the top of $5.5 billion funding it had previously announced.
The minister wondered why an e-commerce market model, in which a company provides an IT platform for buyers and sellers, incurring large losses and adds that it should be considered.
They are investing money in recent years also in storage and other activities, which is welcome and good. But if they are bringing money largely to finance losses and those losses in an e-commerce market model, Goyal said.
He added that in a fair market model with a turnover of $ 10 billion, if a company is incurring a loss of one billion dollars, it certainly raises questions, where the loss came from.
Goyal has said that how a market can cause such a large loss unless it is delivered at predatory prices or some unfair commercial practices.
Fair trade regulator CCI (Competition Commission of India) has recently ordered a probe against e-commerce majors Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.