Govt says will shield small retailers, US calls for fair e-commerce policy

Piyush Goyal says government 'politically compelled' to ensure that small businesses are not forced out

The government has to protect small retailers from e-commerce giants because of "political compulsions", said commerce and industry Minister Piyush Goyal on Thursday as the US trade secretary Wilbur Ross asked India to "fine-tune" its policies.

“E-commerce is expected to be an agnostic platform. It's a platform for trading and a platform which provides opportunities to buyers and sellers in an agnostic fashion to work together,” said Goyal, adding e-commerce companies must not "throw out small retail out of business"

"India is very clear, considering our domestic political compulsions and having about 120-130 million people dependent on small retail--this small retail is a very sensitive subject," he said at the India Economic Forum in New Delhi.

“I'm again and again trying to explain to everybody that the spirit of Indian law is protecting small retail, and I think every country in the world would like to protect employment, work and livelihoods of their people,” he said at a time when Amazon India and Flipkart are holding festival season discounts opposed by trader unions.

US response

Ross, who spoke at the same event, said Amazon and other e-commerce companies didn't get to be the world's biggest by any “evil” mechanism but because of their efficiency.

“They probably would have spent a lot more in India if it didn't feel that there was a diminution in growth due to some of those policies. So there is that cost also to India by the policy. But at the end of the day, the Indian government has to decide how they're going to balance those equations. We're making the advocacy point of view that I just outlined,” he added.

“The question is for a country like India. How do you balance those economic benefits for your population as a whole versus the special interest of the retail segment or of domestic competitors? That's the balancing act that our discussions will hopefully fine-tune,” Ross said.