Jeff Bezos, Amazon’s chief executive, announced a new $1bn investment plan to help India’s small and medium-sized businesses digitally during a visit to India. But India’s trade minister said on Thursday that Amazon’s new investment had not benefited the province. A growing number of Indian brick-and-mortar retailers have accused U.S. industry giants such as Amazon and Wal-Mart’s Flipkart of violating Indian law by using their financial advantages to fight price wars, cost local businesses billions of dollars and discriminate against small businesses. But both companies deny the allegations.
Photo by Piyush Goyal, India’s trade minister, from WikiMedia
Amazon will invest an additional $1 billion to help small businesses do business online in India, based on a $5.5 billion investment pledged in 2014, Bezos said during a visit wednesday local time.
“They may have invested a billion dollars,” Piyush Goyal, India’s trade minister, told a security conference in New Delhi. But if they cause $1 billion a year in losses, they will have to provide $1 billion. ”
“So when they invest $1 billion, they’re not doing India a lot of help. ”
Amazon did not respond to a request for comment.
Bezos’ visit to India comes after the Competition Commission launched an investigation into Amazon and Flipkart over allegations of high discounts on goods and whether the companies discriminated against small sellers.
Mr Goyal said the allegations were “an area of concern to every Indian”.
India only allows foreign e-commerce companies to operate retail marketing platforms, allowing third-party sellers to sell goods to consumers through the platform. Small retailers say Amazon and Flipkart circumvent the rules by representing sellers or suppliers and offer significant discounts through those sellers or suppliers. Both companies deny the allegations.
Mr Goyal welcomed Amazon’s investments in recent years but questioned whether the funds merely compensated for the loss of large discounts on goods.
In October, Amazon’s Indian marketing division lost 56.85 billion rupees ($802 million) in the fiscal year ending March 2019, according to filings by the Indian Company Registry, citing filings.
“How can a market cause such a big loss unless they condone predatory pricing or some unfair trade practices?” he said. These are the questions that really need answers. ”
Indian Prime Minister Narendra Modi is unlikely to meet with Mr Bezos during his visit to India, three sources said on Thursday. Despite trade concerns and India’s ongoing antitrust investigation, Bezos has repeatedly asked to meet with Modi.
Last year, India imposed tough new rules on foreign investment in e-commerce, forcing Amazon to restructure its business and strained relations between the two countries.