Piyush Goyal calls Amazon's $1 billion investment in India 'no big favour'

Piyush Goyal says Amazon not doing a favour to India, CCI begins inquiry into alleged unfair trade practices

Amazon AMZN.O hasn't done India any big favours by announcing a new $1 billion investment, its trade minister said on Thursday, laying bare tensions with the US online retail giant during a visit to the country by its CEO Jeff Bezos.

The remark from the Indian minister comes days after the nation's antitrust watchdog announced a probe into Amazon India and Walmart-owned Flipkart's alleged predatory practices.

Bollywood star Shah Rukh Khan posted a photo of himself with Indian movie director Zoya Akhtar and Bezos.

India does not allow foreign investment beyond 49% in multi-brand retailing and has not yet approved any application of overseas retailers.

Indian Commerce Minister Piyush Goyal says New Delhi is not targeting Malaysia and any curbs will apply to all countries uniformly. "So, it is not as if they are doing a favour to India when they invest a billion dollars", he said in response to a question raised by The Wire's Mitali Mukherjee.

The minister wondered why an e-commerce market-place model, in which a firm provides an IT platform for buyers and sellers, would knowingly incur huge losses.

"They are investing money over the last few years also in warehousing and certain other activities, which is welcome and good". Apart from the billion dollar investment, which is aimed at bringing millions of Indian businesses online, the billionaire pledged to export $10 billion worth of Indian products by 2025.

Goyal said how can a marketplace make such a big loss unless they are indulging in "predatory pricing or some unfair trade practices". Authorities will seek those answers, he said at Raisina Dialogue, a multilateral conference held annually in New Delhi.

The billionaire's visit to India has been marked by a frosty reception including country-wide protests by small retailer associations and an anti-trust investigation launched by the Competition Commission of India.

The minister added that India allows foreign investments in e-commerce marketplace model and in this model buyers and sellers are free to trade, but the marketplace player can not own the inventory, or they can not determine prices. "Don't try to find loopholes within defined letter of the law alone when very clearly we have articulated what the e-commerce marketplace model is". "Whether they are doing it or not, it is for the investigators to decide".

"I have on more than one occasion, said this to the people of India and to all investors, that to please follow the letter of the law and the spirit of the law", he added.

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