January 26, 2020

AMAZON’S $1B INVESTMENT IN INDIA IS NOT A BIG FAVOR?

Amazon is going to invest $1 billion in INDIA but India's trade minister isn't impressed with this investment?

The nation trade minister Piyush Goyal said that the amount invested by Amazon company is not a big favor to the country. The total local investment in India operation up to date is 6.25 billion wherein $1 billion was been contributed by Amazon company announced by chief executive Jeff Bezos.

A conference held on Thursday organized by think tank observer research foundation, in this conference goyal said that " so it is not as if they are doing a great favor to India when they invest a billion dollars". They may invest billion dollars but what if they make a loss of billion dollars every year.

According to a regulatory filing, the Amazon marketplace reported a huge loss of $800 million in the last financial year (March 2019). How can a market place make such a big loss unless they are indulging in beat down or some inequitable trade practices?

India Antitrust Watchdog announced a probe into Amazon and Flipkart to look vat allegation of deep discount whether the companies are in favor of the smaller sellers.
Bezos, who is in India this week, has sought to meet with India’s Prime Minister Narendra Modi, but his request has yet to be approved, a person familiar with the matter told TechCrunch.

Trade Minister reiterated that if foreign e-commerce player wants to do business in India they have to follow the local law of the nation. He said the Watchdog's allegation was the same for every Indian.

Indian government allowed every individual to come to India in a marketplace model.

A marketplace model is a freethinker model where buyers and sellers are free to trade. If any agreement establishes, then the transaction is between buyer and seller only. The marketplace cannot own the inventories, cannot control the inventories and cannot determine the price of according to them, it is an only platform that added a small seller and helps them to sell their product without changing the price without putting their profit then how Amazon makes a profit.

Goyal's comment may raise the tension between Amazon and the Indian government. US senators (law) censure New Delhi after it restricted foreign companies from selling products from their own subsidiaries. This move forced the Amazon and Flipkart to suddenly take out a hundred and thousand of goods from their market place.

On Wednesday hundreds of small traders protested against Amazon and Flipkart and asked the government to interfere.

Bezos said earlier this week that Amazon $1billion would help the small trader to introduce themselves online(Digitalised).

Bezos, who has not addressed Mr. Goyal’s comment or the protests, appeared at an event with Bollywood celebrities on Thursday in Mumbai, where he announced that the company was doubling down on its investment in Prime Video streaming service in the country. He did not disclose any figures.

THANK YOU

PRABHAT SINGH