New Delhi: Commerce and Trade Minister Piyush Goyal on Wednesday raised questions on the announcement of 1 billion greenback funding in India by e-commerce firm Amazon. He mentioned that the American firm isn’t doing any huge service to the Indian financial system, however is compensating for the losses incurred within the nation. He mentioned that the massive loss incurred by Amazon in India truly displays the strategies of promoting merchandise at very low costs which spoil the market. This isn’t good for India, as a result of it impacts crores of retail merchants. Goyal, whereas releasing a report right here, raised many questions on the enterprise mannequin of e-commerce firms. He mentioned, ‘When Amazon publicizes to speculate one billion {dollars} in India, we have fun. We overlook that these billions of {dollars} are usually not coming for any main service or funding within the Indian financial system. The corporate had a lack of one billion {dollars} in its books that 12 months and so they needed to make up for that loss.’
Who obtained Rs 1000 crore
The Commerce Minister mentioned, ‘This loss was as a result of fee of Rs 1,000 crore to professionals. I have no idea who these professionals are. I’d like to know which chartered accountant, skilled or lawyer will get Rs 1,000 crore, until you pay all the massive legal professionals to cease them in order that nobody can battle a case in opposition to you.’
He questioned if a lack of Rs 6,000 crore in a 12 months isn’t a sign of conserving costs very low. It’s simply an e-commerce platform and people firms are usually not allowed to promote on to prospects (B2C). In keeping with the federal government coverage, no e-commerce platform can do direct to buyer i.e. B2C enterprise within the nation. Nevertheless, the minister alleged that these firms reroute all the companies via one entity solely to point out themselves as B2B. He mentioned, ‘How are they doing this? Should not this be a matter of concern for us.’
Concern about small businessmen
Goyal mentioned that the e-commerce sector has a job within the financial system, however there’s a want to consider their function very rigorously and cautiously. E-commerce firms are eliminating the high-value and high-margin merchandise of small retailers, whereas small retailers survive solely on their power. The minister additionally expressed apprehension of a serious social disruption with conventional retailers if on-line retail enterprise grows quickly within the nation. He mentioned that we don’t wish to create an enormous impediment for the ten crore small retailers of the nation within the race for 27 % annual market share of on-line retailers.