India’s Commerce Minister Piyush Goyal has stoked a controversy following his remarks arguing that the business practices followed by many home-grown corporations went against national interests.
The minister launched this broadside while taking part in an annual meeting of the industry body Confederation of Indian Industry on Thursday. He also urged local businesses to think beyond profits or bypassing local laws and work toward making the country self-sufficient. Seventy-five years ago India got freedom from British rule, Goyal said, and now the country must work toward becoming aatmanirbhar (self-sufficient).
He criticized the Tata Group for opposing the proposed e-commerce rules framed by his ministry under the Consumer Protection Act. The salt-to-software conglomerate claims that the new rules will have a major impact on its business, barring its joint venture partners such as Starbucks from selling goods on Tata’s shopping websites.
The Tata Group has big e-commerce plans and its subsidiary Tata Digital is now being positioned to be a super app, a digital ecosystem catering to consumer needs across categories including groceries, medicines and other products. It has lately made a host of acquisitions, most prominently picking up a 64% stake in the leading online food grocer Big Basket.
Goyal has been opposing Amazon and Walmart-owned Flipkart for allegedly bypassing foreign investment rules for e-commerce. He had welcomed the latest court order that allowed an antitrust probe of the two companies to continue.
The minister’s remarks have sparked a social media debate with many users and opposition politicians airing their objections. Following the social media outrage, the government reportedly asked the industry body to pull down the video from its YouTube channel. An edited version was uploaded later. That, too, was blocked, the next day.
The Confederation of All India Traders, an industry body of offline merchants, has welcomed Goyal’s stand and objected to the Tata Group’s opposition toward new e-commerce rules. These traders have been opposing the deep discounts and flash sales offered by e-commerce firms, which they claim affected their business and led to the closure of many stores.
Interestingly, industry watchers are surprised by the minister’s remarks as the Tata Group is a major donor to the ruling Bharatiya Janata Party. According to information shared by the Election Commission of India, the ruling party received a donation of 4.73 billion rupees from the corporations, out of which nearly 75% (3.56 billion rupees or $48 million) was from the Tata Group’s Progressive Electoral Trust.