A day after lambasting e-commerce companies on their business practices and the harm they are causing to small retailers and behaviour of consumers, commerce and industry minister Piyush Goyal softended his stance on Thursday and said the government wants to invite them to invest in India.
“We are not against online at all. We want to invite foreign direct investment (FDI). We want to invite technology. Online has tremendous benefits,” Goyal said at an event in Mumbai. His comments were significantly tempered. On Wednesday, the minister had expressed concern at the exponential growth of e-commerce in India, given its impact on brick-and-mortar stores. He had observed that the massive amounts of FDI that e-commerce companies bring in are used to cover the losses they suffer for selling goods at “predatory prices”.
The minister had also said that the online food delivery business would end up making India a country of couch potatoes, watching OTT and having food at home every day. A day later, he said e-commerce is “giving you comfort in your homes”. Online commerce has tremendous benefits, he said, adding, “It has the benefit of convenience, benefit of speed.” He said that what the country and the government desire is fairplay, honesty to customers and honesty to suppliers of goods and services.
He had said on Wednesday that e-commerce companies with FDI which are not allowed to sell directly to consumers and can only operate as a marketplace are flouting these rules by floating multiple entities with the help of Indian entities.
A large part of Wednesday’s speech by the minister was focussed on the harm that e-commerce will do to the small retail stores which number around 100 million across the country and social disruption it would cause.
He said that the government wants to ensure that the other people also have a fair chance to compete against such online businesses.
India’s e-commerce industry is expected to grow at $325 billion by 2030 from $70 billion at present, according to an Invest India report. The share of e-commerce in overall retail is around 7.8%. The buyers on e-commerce platforms are also expected to touch 500 million by 2030. The sector is growing at 27% a year, so by that rate it will double in every 2.5 to three years.
