Bezos promises India billions in investment, but not all want it

INDIAN INVESTMENT: Amazon CEO Jeff Bezos in New Delhi, India, yesterday
INDIAN INVESTMENT: Amazon CEO Jeff Bezos in New Delhi, India, yesterday

Amazon tycoon Jeff Bezos promised a new billion-dollar investment in India, just two days after authorities launched an antitrust investigation into the e-commerce giant.

A three-day visit by Bezos sparked protests in New Delhi and other cities by traders who accuse Amazon and its main US-owned rival Flipkart of killing off India’s army of street traders.

Bezos sought to head off critics by promising $1bn (R14.3bn) to digitise small and medium Indian businesses.

“We will use our global footprint to export $10bn (R143.6bn) worth of ‘Make in India’ products across the world by 2025,” he said, referring to Prime Minister Narendra Modi’s campaign to boost national production.

Bezos said “the 21st century will be the Indian century” and that the US-India alliance would be the most important.

Amazon and Flipkart face increasing scrutiny and resentment despite popularity among customers.

The competition commission of India announced on Monday it is investigating both companies over accusations they undermine traditional traders by favouring “preferred sellers” on their platforms.

Media reports said Bezos has sought a meeting with Modi, but neither the government nor Amazon would confirm if talks would be held.

Amazon has said it will co-operate with the investigation and is confident it is operating legally.

The commission fined Google $21m (R301.6bn) for abusing its dominant position.

“We are not against e-commerce,” Sumit Agarwal, national secretary of the Confederation of All India Traders, which says it represents 70-million small businesses, said.

“We just want the commission and the government to set up a fair and equitable playing field where the Amazons and Flipkarts cannot abuse the system with unfair subsidies and their favoured traders.”

The government is to announce a new e-commerce policy by March.

Merchants accuse Amazon and Flipkart of flouting India’s tough foreign investment rules and pouring billions into discounts that harm traditional traders.

Agarwal highlighted special deals with cellphone makers under which they are sold online, often at discount, before they reach high street shops.

He said 55,000 of the 100,000 small traders who have gone out of business in the past six months — when Amazon and Flipkart have fought a merciless price cutting war — were cellphone sellers. — AFP