Union Minister Piyush Goyal | (Photo: PTI)
Commerce and Industry Minister Piyush Goyal on Wednesday expressed concern over predatory pricing by e-commerce platforms and possible job losses in the traditional retail sector.
While the minister acknowledged the crucial role of e-commerce, he stressed the need to “think cautiously” about how that role can be played in a “more organized” way, considering both the benefits and drawbacks of the e-commerce space.
“Are predatory pricing policies good for the country?” Goyal asked at the launch of the report Net Impact of E-commerce on Employment and Consumer Welfare in India.
The minister further criticised the investment strategies of large e-commerce companies, suggesting that their losses are offset by hefty payouts to top-notch professionals and lawyers. “When Amazon says it is going to invest $1 billion in India, we all celebrate, but we forget the underlying story: that $1 billion is not going to any great service or investment that will support the Indian economy. They had a $1 billion loss on their balance sheet that year. They have to cover that loss,” he said.
“And how did that loss happen? They paid Rs 1,000 crore to professionals. Unless you are paying all the best lawyers to block them so that no one can file a case against them… If you lose Rs 6,000 crore in a year, don’t you think that is predatory pricing? What caused that loss? They are involved in all the e-commerce platforms. They are not allowed to do business with B2C companies,” Goyal said.
According to the report published by Pahle India Foundation, e-commerce is a key driver in job creation as online sellers employ 54 per cent more people and almost twice as many women. The report also noted that the growth of e-commerce has not come at the cost of traditional retail. Less than a fifth of offline sellers reported closure of physical stores in their neighbourhoods since 2020, the year that saw a boom in the e-commerce space. Meanwhile, physical retail continues to grow and thrive.
Goyal, however, disagrees with the report’s findings and says there is a need for policies to protect local businesses and ensure fair competition in the e-commerce sector. He stresses that the government should take a proactive role in assessing the impact of e-commerce on local employment and businesses.
First published: August 21, 2024 | 1:00 PM IS
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