Union Minister of Commerce and Industry Piyush Goyal clarified the government’s stance on e-commerce, emphasizing the importance of fair competition between online platforms and traditional retail businesses. His remarks come after he accused Amazon of predatory pricing, raising concerns about the impact of e-commerce on small retailers.
Government Welcomes E-commerce with Conditions
Speaking at an industry event in Mumbai on August 22, 2024, Goyal stated, “We are very clear that we want to invite foreign direct investment (FDI), we want to invite technology, and we are not against online commerce at all. Online e-commerce has tremendous benefits, including convenience, speed, and comfort.”
However, Goyal stressed that the government’s primary concern is ensuring that the rapid growth of e-commerce does not harm traditional retail businesses. “We want fair competition between online and offline businesses, and we are focused on creating a level playing field,” he added.
Criticism of Amazon’s Investment Strategies
Goyal’s clarification follows his earlier criticism of Amazon’s business practices. He accused e-commerce giants like Amazon of engaging in predatory pricing, which he believes is detrimental to small retailers. Goyal suggested that while these companies face significant losses due to large payments to professionals and legal experts, they offset these losses with new investments, creating an uneven playing field.
Impact of E-commerce on Employment
India’s e-commerce sector has seen rapid growth, with a projected compound annual growth rate (CAGR) of 27% from 2018 to 2030, according to a report by Pahle India Foundation titled ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India.’ The report also highlights that e-commerce has generated 16 million jobs in the country.
Balancing Growth and Fairness
While the government recognizes the benefits of e-commerce, Goyal emphasized the need for regulations that ensure fair competition. “We are not against the growth of e-commerce, but we must ensure that it does not come at the cost of traditional businesses and jobs,” he concluded.
Goyal’s remarks reflect the government’s commitment to fostering a balanced and fair market environment that supports both online and offline businesses, ensuring long-term sustainability and growth in India’s retail sector.
