Piyush Goyal’s comments on Thursday that Amazon isn’t doing the country a favour by investing $1 billion didn’t go down well with many, including India Inc. Jeff Bezos, during his three-day visit to India, announced on Wednesday that Amazon will be investing $1 billion in India to help bring over 10 million small and medium businesses online.
However, a day after his announcement, Commerce and Industry Minister Goyal said that Amazon was not doing a favour to the country by the investments and questioned how the online retailing major could incur such "big" losses but for its predatory pricing.
"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 dollars. So, it is not as if they are doing a favour to India when they invest a billion dollars," he said at the Raisina Dialogue in New Delhi.
While several Twitter users expressed their displeasure on the Commerce Minister’s statement, the CEO of an MNC told Economic Times if this is the response companies are going to get from the current government, they will think twice before making or announcing investments here.
Even though Piyush Goyal clarified on Friday that his statement on Amazon was misconstrued and that the government welcomes all investments within regulations, the damage seems to have been done.
I have on more than one occasion, said this to the people of India and to all investors, that to please follow the letter of the law and the spirit of the law. Don't try to find loopholes when clearly we have articulated what the e-commerce model is: @PiyushGoyal
— Piyush Goyal Office (@PiyushGoyalOffc) January 16, 2020
The statement from Goyal comes at a time when the Indian economy is facing a slowdown, with GDP growth being forecasted to dip to an 11-year low of 5% in the current fiscal. Several economists have said that boosting investments in the country will really help growth speed up in the country.
A recent UN report too said, "The combination of fiscal stimulus and financial sector reforms, boosting investment and consumption, is expected to support a recovery in growth to 6.6 per cent, but it will take continued structural reforms to bring India's growth back to its previous levels.”
It is, therefore, not surprising that Goyal’s snub at Amazon has not boded well with many in the country.
The Economic Times report said that several business leaders in the country were unhappy and offended with his comments.
Some believed that it didn’t reflect well on India and that it will drive foreign investments away.
And not just business leaders, several Twitter users and members of other political parties too, expressed their displeasure.
"Piyush Goyal statement qua Amazon makes mockery of BJP Govt much advertised “Invest in India” scheme; PM Modi travels all over world telling investors to invest in india & his Minister says they r not doing favors by investing in India-Is “Run away from India” new scheme of Govt? (sic),” Jaiveer Shergill, National Spokesperson of the Indian National Congress said on Twitter.
Congress leader and former finance minister P Chidambaram too reacted to Goyal’s comments saying that the minister should snub more people to help India achieve the $5 trillion economy target.
Making matters worse, this isn’t the only hostility Bezos faced during his visit. Scores of traders from across the country protested his visit to India chanting slogans such as ‘Go back Bezos’.
PM Modi and Piyush Goyal too, didn’t meet with Bezos. It has been speculated that both Goyal and PM Modi were not meeting Bezos not just because Amazon faces protests from traders in India, but also because the government was unhappy with the Washington Post's criticism of the government. Bezos is the main investor of Washington Post.
In terms of the traders, it is important for the government to keep traders happy ahead of the upcoming Delhi elections.
However, Bezos seems unfazed by the criticism he faced during his visit. Not only did Amazon announce an investment of $1 billion dollars, Bezos also announced that the company will be doubling down on its investment in its OTT platform Prime Video and that it plans to create one million new jobs in India by 2025. This will be through continued investments in technology, infrastructure, and its logistics network, Amazon announced on Friday.
“We are investing to create a million new jobs here in India over the next five years. We’ve seen huge contributions from our employees, extraordinary creativity from the small businesses we’ve partnered with, and great enthusiasm from the customers who shop with us—and we’re excited about what lies ahead,” Bezos said.
Amazon will be hiring talent to fill roles across Amazon in India, including software development engineering, cloud computing, content creation, and customer support.
It will also be hiring talent to support Amazon’s operations in India in areas like logistics, engineering and facilities management, packaging, and customer fulfilment.