The issue of predatory pricing by the e-commerce companies like Amazon and Flipkart is not going away too soon. The Minister for Commerce Piyush Goyal has again spoken on the issue, this time in the form of a reply to a question in Parliament. The gist of the answer placed by the minister on the table is that the Department for Promotion of Industry and Internal Trade (DPIIT) that works under his ministry had received complaints of predatory pricing being engaged in by the e-commerce companies and a probe is on.
Explaining the issue, the Minister has said that under the present foreign direct investment (FDI) rules governing online retail, the foreign investor can set up a marketplace and run it as a neutral entity offering a level playing field to all sellers on the platform. The foreign investor, in this case, FlipKart Internet Pvt Ltd and Amazon Seller Services Pvt Ltd, cannot follow an inventory-based model of business. An investigation by the Competition Commission of India is already underway to determine if the complaints against these two companies of excessive discounts, exclusive arrangements and preferential treatments to certain sellers on its platform are indeed maintainable.
Meanwhile, in response to another question in Parliament on the employment generation through FDI, the minister said there is really no correlating data between the two. He said FDI is pursued with the intention that the investments will augment domestic capital while creating employment opportunities as well.
There was another question on the proposed Visakhapatnam-Chennai industrial corridor. Minister Goyal said the Asian Development Bank is funding the project and the funds will be released in tranches for the execution of the corridor project. Visakhapatnam, Machilipatnam, Donakonda and Chittoor are the four nodes identified for this Vizag-Chennai Industrial Corridor (VCIC).