Why did Union Minister Piyush Goyal get angry at online companies, this is the whole matter

Union Minister Piyush Goyal is furious with online e-commerce companies these days. Recently, expressing concern about e-commerce companies like Amazon, Union Minister Piyush Goyal alleged that online retailers have not fully complied with the country's Foreign Direct Investment (FDI) laws. The minister said that consumers should think about who benefits from their purchases and should learn a lesson from the debate they have started. Let's know what is the whole matter…

Commerce and Industry Minister Piyush Goyal on Wednesday questioned Amazon's announcement of investing $1 billion in India, saying that the American retailer is not doing any great service to the Indian economy, but is compensating for the losses incurred in the country. He said that the company's move smacks of compensating for losses incurred abroad. This is not good for the country, because it affects crores of small retail sellers.

The minister said that the e-commerce sector has a role to play, but this role has to be understood and thought about very carefully and cautiously. He also said that e-commerce companies are eliminating the high-priced, high-margin products of small retailers, which are the only thing through which small-and-pop stores survive. Apart from this, he said that the impact of cloud kitchens on restaurants and people buying food products online has to be seen.

Why is Piyush Goyal angry?

Talking to reporters after addressing a program of chartered accountants, Goyal said that there is a provision in Indian law that only B2B (Business to Business) transactions are allowed in the country for foreign e-commerce companies. Goyal said, "Sadly, the law has not been followed completely. By this, structures have been created which are detrimental to the interests of small traders and small retailers."

The Union Minister said that the deep pockets of companies like Amazon help them indulge in market-distorting pricing and they also use algorithms to influence consumer choices and preferences.

The minister had on Wednesday sparked a debate by expressing concern over the existence of small shops in the country. He had said that prices are rising too much and also warned of social disruptions as more and more people are becoming unemployed. On Thursday, he clarified that the government is not against e-commerce companies but wants them to be fair and honest. He had said that the government wants to encourage online companies and is in favor of such units which have tremendous advantages like speed and convenience.