Piyush Goyal Clarifies Government Stance on E-Commerce, Advocates Fair Competition

New Delhi: Commerce and Industry Minister Piyush Goyal, after initially criticising Amazon for its pricing strategies, clarified on Thursday that the government is not against e-commerce but is committed to ensuring fair competition between online and offline markets. Speaking to students at Atharva College in Mumbai, Goyal emphasized that while the government welcomes foreign direct investment (FDI) and technological advancements, it aims to maintain a level playing field for both traditional and online retailers.

“We are not against online platforms at all. E-commerce offers numerous advantages, such as convenience, speed, and comfort,” Goyal stated. He underscored that the government’s intent is to support the growth of online businesses while ensuring that small retailers can coexist without facing unfair competition. He explained that FDI regulations, which permit investment in online services only under a business-to-business model, are designed to protect small retailers.

Goyal’s remarks come a day after he expressed concern about the rapid expansion of the e-commerce sector, warning that it could negatively impact employment in traditional retail. He highlighted the issue of large e-commerce platforms attracting business away from small retailers by offering high-margin products at discounted prices.

Goyal also took a critical stance on the investment strategies of major e-commerce companies like Amazon, suggesting that their financial losses, often due to substantial payments to professionals and lawyers, are offset by new investment rounds.

Despite his concerns, Goyal acknowledged the importance of e-commerce in India’s economy. He called for a careful assessment of the sector’s role, considering both its benefits and challenges. His comments are particularly significant given the rapid growth of India’s e-commerce industry, which, according to a report by the Pahle India Foundation, is expected to grow at a compound annual growth rate of 27% from 2018 to 2030. The report also noted that the sector has significantly contributed to employment, with an estimated 16 million jobs generated by vendors.