Business Standard

Volume XXI Number 92

AHMEDABAD TUESDAY,17 AUGUST 2021

Real national interest

E-Commerce spat reveals deeper faultlines
n OTO
widely reported oomments to the Confederation of Indian Industry
Piyush Goyal
(C
and Industry Piyush Goyal
indi Cently, Union Minister of Commerce were not behaving wn
the nat in his opinion some Indian companies commerce and inauStTy
national interest in mind. Such remarks from the their
1LUSEer Clearly deserve close scrutinv and discussion. Both immediate COntext
and provocation, as well as the largernarrative about the governments relaO
wIucorporate capital, need to be examined. At the first count, Mr Goyal speCiicauy
said had objected to
n e d the Tata Group of companies, which he reportedly is that these are
position
e d ror e-commerce. The Union government's
pro-consumer rules. for, dissent irOm
tappears that it was willing to accept, and was even prepared
whether Amazon or
TOreign-oWned participants in the e-commerce sphere-
such as the Tatasas
Fipkart. But that objections also came from conglomerates Reliance Retail. For
wel as other domestic players in organised retail, including
broad constraints on e-
groups such as Tata and Reliance, the fear is that overly
commerce websites will prevent them even from close cooperation with their part"
ner brands, such as Starbucks in the case of Tata or multiple brands such as Armani,
Retail. The minister's opinion
Burberry, and Marks&Spencerinthe case of Reliance nationalistic, and that
seemed to be that such complaints were not sufficiently
behaviour in which organised retail players
they were embedded in a pattern of
onerous forms of regulation.
Sought to find ways to escape the most the organised retail field is one that
A policy that pleases no major player in
defence. This has not so farbeen provided. It is
requires a vigorous and intellectual rules will benefit consumers, given that
far from clear that the new e-commerce
discounts from variouse-commerce participants.
many ofthem have enjoyed deep
motivation is to protect unorganised retail, which
Perhaps the government's real
considerable political and electoral power. But if so, that
can in some areas have
undeniable is that regulation of e-commerce in
should be stated upfront. What is
and protectionist. The new ules should
India has been haphazard, inconsistent, chances are
errors as well as their potential. The
be evaluated in the light of past the regulatory
absence ofsuchadefence, it is
that they will be found wanting. In the
not corporations.
wing of the state that is at fault, rela
The broader question here is what this reveals about the government's
senior officials of the government
tionship with the private sector. In the past,
Indian industry for errors such as
and the Union minister himself- have berated
told Amazon last year that
not investing enough. Mr Goyal himself also famously
no favour. The prime minister,
its promise of$1 billion of new investments did India
that deregulation and greater
in contrast, said in his Independence Day speech
tnust between industry and government were a cherished achievement. Tmist
cannot be built by berating investors, whether Indian or foreign.
Regulations should
be farmed on grounds of principle, and usingeconomic theory and empirical inves
and industry feels the
igation. Clearly, the government feels industry is disloyal, indicator of the
is a bully. This gap must be bridged. It is a lowering
govemment offline when
in the sector that the CII itself took the minister's speech
it began toprivate
fear attract attention. This is not in keeping with its principles. Nor does it

It is in restoring srowtn
portend well for healthy investment and industrial growth.
and investment that the national interest lies.