India’s competition watchdog has initiated an inquiry into alleged discriminatory trade practices by online marketplace Amazon against small traders in the country, said Piyush Goyal, commerce minister, on Thursday.

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Amazon has been facing allegation of discriminatory trade practices from small traders.

Goyal said Amazon is not doing a favour to India by investing a billion dollar, adding that if the company is getting $1 billion to finance losses then the question is “where the loss came from”. Authorities will seek those answers, he said at Raisina Dialogue, a multilateral conference held annually in New Delhi.

Goyal’s comment came after Amazon founder and CEO Jeff Bezos on Wednesday said at an Amazon event that it pledged $1 billion to help small businesses to grow their businesses online. Bezos landed in India for a three-day visit.

“We have strict rules on FDI in multi brand retail. Anyone who uses ecommerce model to enter multi brand retail will have to be investigated,” the minister said.

Goyal said: “I have said on more than one occasion to all investors that please follow the letter of the law and the spirit of the law. Don’t try to find loopholes within defined letter of the law alone when very clearly we have articulated what the e-commerce marketplace model is.”

The minister added: “How can a marketplace make such a big loss unless they are indulging in predatory pricing or some unfair trade practises? These are real questions which need answers and I am sure authorities who are looking at it will seek those answers and I am sure the ecommerce companies will have their say on that.”

Every ecommerce player has to follow rules of the marketplace, the minister added. “Message to investors is please follow letter and spirit of the law.”

On Wednesday, a group of traders protested against Amazon’s policy of offering deep discounts on products. Amazon, however, denied all the allegation of unfair trade practices in the country.

First Published:Jan 16, 2020 5:33 PM IST