D2C

E-commerce companies and the Centre: At loggerheads?

Post By : Abhilash Shrivastava
Post Date : July 3, 2021
Share with
Reading Time: 2 minutes

Union Minister of Commerce and Industry Mr Piyush Goyal seems to be livid with e-commerce giants like Amazon and Walmart, and has accused them of being arrogant and disdainful towards local laws. He even criticised their alleged indulgence in predatory pricing practices.

Lambasting them further, Mr Goyal said “When large e-commerce companies proudly put out figures about creating a million jobs or propping up small-time businesses, they fail to take into account the job losses that take place because of their influence, scale and access to low cost capital, indicating towards alleged illicit practices of e-tailers Amazon and Walmart-owned Flipkart.”

“If you create one million jobs at the cost of 10 million other jobs, clearly it is to the detriment of India”, he added.

Amazon has, so far, announced the creation of over 1 million jobs in India and its plans to employ another 1 million by 2025. While Flipkart is estimated to have created between 70,000 to 1 million direct and indirect jobs, Amazon and Flipkart offered job opportunities to thousands of additional workers during peak seasons as a part of e-commerce sales. According to reports, e-commerce and logistics companies together have created over 3,00,000 odd jobs during Diwali last year— a major chunk of them were in logistics functions, warehousing and customer service.       

He further remarked, “A host of such companies have arrived in India and are trampling the laws of the land in many ways. I have had several exchanges with these large companies, particularly the American ones, and I sensed a subtle air of arrogance.”

Mr Goyal neither named Amazon or Flipkart directly nor specified which laws had been violated. But his comments coincide with the growing calls from small Indian traders and retailers, who accuse these large e-commerce companies of circumventing Indian consumer protection and competition laws.

Goyal did not stop here, and he denounced companies for indulging in “forum shopping” in courts and pointed to their failure in complying with a probe launched by the Competition Commission of India (CCI).

“To my mind, if they have nothing to hide, if they are doing honest business practices, why don’t they respond to the CCI?”, the minister, said at the virtual event organised by the Stanford India Policy and Economics Club.

Be it public or private platforms, Mr Goyal is known to speak his mind and does not mince his words. Nevertheless, this could be the first occasion where he lashed out at e-commerce companies so severely.   

His comments have sounded the warning bells for both Amazon and Flipkart, more so, because new e-commerce regulations have already caused substantial damage to their business prospects. After this, the duo were compelled to revisit their certain business strategy.

Separately, in a letter to Prime Minister Narendra Modi, the Confederation of All India Traders, accused e-commerce companies of treating India like a “Banana Republic” with weak laws.

The body urged the government against any dilution of proposed laws notwithstanding the lobbying put up by both e-tailers. However, The US-India Business Council, a top U.S lobby group, described India’s proposed new e-commerce rules as concerning in an internal memo this week.      

Leave a Reply

Your email address will not be published. Required fields are marked *