Minister of Commerce Piyush Goyal stepped up criticism of American e-commerce giants such as Amazon and Walmart, accusing them of arrogance and violating local laws through predatory pricing practices.
Goyal said companies used their scale and access to large pools of cheap capital to engage in predatory pricing practices “at the expense of family stores.”
“Some of these big e-commerce companies came to India and blatantly violated the laws of the country in many ways,” he said at a virtual event late Saturday night. “I’ve had several contacts with these big companies, especially American ones, and I see a little arrogance,” he said.
Goyal did not name Amazon.com or Walmart Inc. directly. Flipkart – the two dominant e-commerce players in India – or indicate which laws have been violated. But his comments came amid growing buzz from small Indian traders and retailers accusing American giants of circumventing Indian consumer protection and competition laws.
Amazon and Flipkart did not immediately respond to requests for comment on Goyal’s harsh criticism.
Both companies have denied the accusations made against them by traders. Goyal also criticized the companies for doing “forum shopping” in courts and not following an investigation launched by the Competition Commission of India (CCI).
Flipkart and Amazon ask for help against CCI’s attempt to reopen an investigation into their business practices after a judge this month dismissed the companies’ initial arguments.
“In my opinion, if they have nothing to hide, if they conduct fair business practices, why are they not responding to CCI?” Goyal said at a virtual event hosted by the Stanford Politics and Economics Club of India.
His comments came just days after the Center unveiled a new set of e-commerce rules that could undermine Amazon and Flipkart’s ambitions in India and force the duo to rethink certain business structures.
In addition, in a letter to Prime Minister Narendra Modi on Sunday, the Confederation of All India Traders accused e-commerce companies of treating India as a “banana republic” with weak laws.
The authority has called on the government to ensure that the proposed e-commerce rules are not diluted despite lobbying efforts by the e-commerce giants.
The American Indian Business Council, the leading US lobbying group, in an internal memo this week described India’s proposed new e-commerce rules as of concern.