Ahead of meet with USTR, Piyush Goyal flags ‘predatory pricing’ in e-commerce

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New Delhi | Published: November 13, 2019 3:58:54 AM

In recent months, the US has expressed concern over India's FDI rules in e-commerce that ostensibly hit players like Amazon and Walmart-backed Flipkart.

Piyush Goyal’s  statement comes barely a day before his scheduled meeting with US Trade Representative Robert E Lighthizer

Commerce and industry minister Piyush Goyal on Tuesday flagged risks from the “predatory pricing” strategy of some e-commerce players in India, at a key gathering of BRICS ministers and officials in Brazil.

Speaking at a session on ‘Advancing BRICS Trade and Investment Cooperation – the road ahead’ in Brasilia, Goyal said: “I would like to highlight the adverse impact of predatory pricing indulged in by some e-commerce players which adversely impact millions of small retailers. It is important for e-commerce to follow the letter and spirit of the law.”

His statement comes barely a day before his scheduled meeting with US Trade Representative Robert E Lighthizer, aimed at narrowing differences over a limited trade deal that both the countries have been negotiating on for months now. In recent months, the US has expressed concern over India’s FDI rules in e-commerce that ostensibly hit players like Amazon and Walmart-backed Flipkart. The rules clearly bar online marketplaces with foreign investments from offering discounts on products sold on their platforms and also prevent them from owning inventory, except in food retail.

The government has already asked Amazon and Flipkart to reply to a set of questions on their operations, following allegations by brick-and-mortar stores that the etailers have flouted FDI rules, especially during the recently-concluded festive sales. For their part, the etailers have maintained that they have always complied with the FDI rules.

Goyal has repeatedly called upon etailers to comply with both the letter and the spirit of the FDI rules, cautioning that any deviation could invite government action. Last month, US commerce secretary Wilbur Ross had asked India to balance the interest of large etailers with offline retailers’ in its e-commerce policy.

The minister also highlighted the growing risks to global trade from rising non-tariff barriers, which are being increasingly employed by developed and developing countries. “Interacted with BRICS Trade Ministers and spoke about the growing trend of non-tariff barriers which deny market access, lead to economic uncertainty and raise the cost of doing the trade for developing countries especially MSMEs. Thus, a win-win mindset is needed to spur trade & promote equity,” Goyal said in a tweet.

Prime minister Narendra Modi will attend the BRICS Summit, with the theme of ‘Economic growth for an innovative future’, to be held on November 13 and 14 in Brazil.

Goyal also highlighted India’s defence of free and fair trade and the revival of rules-based multilateral trading system, which the World Trade Organisation represents. The WTO has in recent years come under sharp attack from the US, which has blocked appointments of judges to the appleate tribunal of the multilateral body’s dispute settlement mechanism.

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