All foreign investments must adhere to law of the land, says Piyush Goyal
Ahmedabad: A day after stating that Amazon was not doing any favour to India by investing one billion dollars, Union minister Piyush Goyal on Friday 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. "I was only saying that investment should come as per the rules and regulation," Goyal said.
Big ticket investments in the retail space should not hurt small traders who does not have "lakhs and crores" of rupees, Goyal, who was here to inaugurate 'Ahmedabad Design Week', a three-day long event for the students of various design and architecture institutes, said.
"We welcome all kinds of investment. However, necessary legal process would follow if any investment is made outside the purview of law," the minister pointed out.
"Our country has some rules for e-commerce industry. We welcome all those investments which comes as per these rules. However, it should not create unfair competition for the small traders of India. They do not get zero per cent loans. They do not have lakhs and crores of rupees. They do business with small capital," said Goyal.
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 seen in a perspective," Goyal said here adding that all countries welcome foreign investment but it should be within the framework of the law.
"Our laws says that interests of such small traders should not get hurt. Investment should be in the purview of set parameters. That is the view of me and the government," he added.
If investments are not within the framework of law, then legal action would be initiated, he told reporters. The minister in a tweet also expressed similar views. "We welcome all kinds of investments that follow the letter & spirit of law. If some investment is outside the legal purview, appropriate action will be taken. Our government wants to ensure that unfair competition is not created for crores of small traders and retailers of the country," Goyal said in a tweet.
Goyal has stated that e-commerce companies have to follow Indian rules in letter and spirit and not find loopholes to make a back-door entry into multi-brand retail segment.
India does not allow foreign investment beyond 49 per cent in multi-brand retailing and has not yet approved any application of 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 place model, where a firm provides an IT platform for buyers and sellers, incurring huge losses adding that it needs to be looked upon. "They are investing money over the last few years also in warehousing and certain other activities, which is welcome and good. But if they are bringing in money largely to finance losses and those losses in an e-commerce market place model," Goyal said.
He has added that in a fair market place model in a turnover of $10 billion dollars, if a company is incurring loss of billion dollars, it "certainly raises questions, where the loss came from". Goyal has said that how can a marketplace make such a big loss unless they are indulging in "predatory pricing or some unfair trade 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.