Costly growth: India minister slams online ‘predatory pricing’ for hurting small retailers

India’s commerce minister has sparked controversy by criticising online platforms including Amazon for “predatory pricing” practices that undermine small businesses, a move analysts suggest is aimed at cautioning global e-commerce players while reassuring local retailers – a key voter base for the ruling party.

“When Amazon says that we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that the billion dollars are not coming in for any great service or any investment to support the Indian economy,” Piyush Goyal said at the launch of a new report by the Pahle India Foundation on e-commerce’s impact on employment and consumer welfare last week.

Goyal noted that Amazon had suffered “a billion-dollar loss in their balance sheet” in the previous financial year and suggested the money was spent on legally protecting the company’s practices.

“They paid Rs 1,000 crores [10 billion Indian rupees or US$120 million] to professionals. I do not know who these professionals are … I would love to know, which chartered accountants, professionals or lawyers get Rs 1,000 crores unless you are paying all the top lawyers to block them so that nobody can fight a case against you,” Goyal said.

Such losses smacked of “predatory pricing”, Goyal noted, especially since the company was not allowed to sell any goods directly to consumers in the country.

The minister said e-commerce companies were eating into the high-value products of family-run stores that enabled them to survive. Such stores had virtually disappeared in Europe and America due to the e-commerce boom, he said.

Amazon India declined to comment on Goyal’s remarks.

But the company shared a blog post from June last year in which CEO Andy