India’s Commerce Minister Piyush Goyal has accused Amazon and other e-commerce firms of engaging in predatory pricing practices, which he believes are disrupting millions of traditional retail stores in the country. Goyal’s remarks highlight concerns that the rapid expansion of e-commerce giants like Amazon and Walmart’s Flipkart is negatively impacting small, brick-and-mortar retailers.
In recent years, Amazon and Flipkart have transformed India’s retail sector through significant investments and aggressive discounting strategies. However, Goyal raised questions about the legitimacy of these practices, suggesting that the investments might be used to offset business losses rather than enhance services. He pointedly criticized Amazon’s substantial financial commitments to India, questioning whether these investments are genuinely beneficial or merely a cover for financial losses.
Despite these accusations, Goyal did not provide specific evidence to back his claims. His comments came during an event in New Delhi, where he suggested that Amazon’s reported investments are not as altruistic as they appear. Goyal implied that such losses could be indicative of predatory pricing practices, given that these companies are not permitted to sell directly to consumers under Indian regulations but instead operate as marketplaces.
Amazon and Flipkart have yet to comment on these allegations. In June of the previous year, Amazon announced plans to increase its investment in India to $26 billion by 2030, including funds for its cloud services and a target of $20 billion in merchandise exports from India by 2025.
Goyal has previously criticized U.S. e-commerce firms, accusing them of using their extensive resources to undermine local businesses and circumvent regulations. A 2021 Reuters report revealed that Amazon had assisted a select group of sellers on its Indian platform, offering them discounted fees and facilitating regulatory workarounds, though Amazon denied these claims and asserted its compliance with local laws. Recently, two major sellers on Amazon’s platform who faced similar allegations have ceased their operations.
Additionally, Amazon and Flipkart are under investigation by Indian antitrust authorities, but both companies deny any misconduct.
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