By Mark AmesOn June 4, 2014
Well that was fast. Two weeks ago, we reported that eBay founder Pierre Omidyar’s top man in India had secretly helped elect controversial ultranationalist Narendra Modi, implicated by Human Rights Watch and others in the gruesome mass killings and cleansing of minority Muslims. As we also revealed, shortly after Omidyar’s man publicly joined the Modi campaign in February, Modi suddenly began warming up to the idea of letting global e-commerce companies into the world’s third largest economy. Omidyar’s eBay, which draws the majority of its revenues from overseas operations, has been champing at the bit to get into India.
Now, just weeks after Modi’s election, it seems their prayers have been answered.
Today, Reuters is reporting that Modi is planning to open India up to global e-commerce firms like eBay next month, and that Modi’s industry minister has been drawing up the new guidelines with input from top eBay officials, along with their e-commerce counterparts from Google, Amazon, Wal-Mart and others.
Calling the move to allow foreign e-commerce into India “one of the first tangible signs of economic reform by the business-friendly government of Prime Minister Narendra Modi,” Reuters reports that the sector is expected to quadruple its share of the overall economy by 2020. India’s e-commerce industry is growing at 40-50% annually. Those numbers, and Modi’s accommodating behavior, is making Pierre Omidyar’s underlings salivate:
“Deepa Thomas, spokeswoman for eBay in India, said it was excited about the opportunity and believed in the need for a carefully calibrated approach to opening up the sector.
“The industry ministry that drafts FDI rules recently met officials from companies including Amazon, Google, eBay Inc, Wal-Mart and Indian e-tailer Flipkart to finalise the investment guidelines, the people said.
“Global online retailers like Amazon and eBay are currently banned from selling products they have sourced themselves, and must rely on third-party suppliers. Their platforms, which they own fully, are marketplaces for these outside suppliers.
“The government is likely to end this ban, paving the way for global retailers to bring their formidable supply chain, and cheaper goods, into India, potentially boosting consumption and benefiting small manufacturers and traders.”
As we reported, the longtime managing director and partner for Omidyar Network India Advisors, Jayant Sinha, began working to help elect Modi since at least 2012, while publicly doling out tens of millions of Omidyar’s money to for-profits and to non-profits, at least one of which was involved in an anti-corruption campaign that undermined the center-left ruling government, and benefited Modi’s far-right BJP party.
Omidyar’s top India man also concurrently served as a director in a powerful BJP think tank, the India Foundation, chaired by Modi’s hardline National Security Advisor, Ajit Doval — “a giant among spies” according to the Hindustan Times. After stepping down from Omidyar Network in February of this year, Sinha worked full-time for Modi, the India Foundation, and for his own successful run as a BJP candidate for parliament.
Another NGO that Omidyar invested in, the Institute for Policy Research Studies (IPRS), was accused of illegally trying to lobby India’s parliamentarians to vote for opening up India’s e-commerce market in late 2012. The IPRS nonprofit ran a program in which their staffers provided India MP staffers with “nonpartisan” research. In 2012, India’s intelligence bureau accused the IPRS of “compromising national security” and described it as “shrouded in mystery.”
Omidyar Network had pledged $1 million to the IPRS, and the Ford Foundation pledged half a million more — but the Indian government rejected the IPRS’s application to register as a foreign-funded NGO, deeming it a threat to India’s parliamentary integrity, and its national security. Google’s corporate philanthropic arm, Google.org, had previously given $880,000 to the same NGO program, under Sheryl Sandberg’s watch.
The previous, center-left Indian government not only nixed the Omidyar-Ford Foundation NGO-slash-e-retailer-lobby front, it also announced last year that it did not plan to allow e-commerce firms like eBay open access into its markets. This despite the fact that the Obama administration was pressuring India’s government to let eBay in, according to The Hindu:
“The U.S. Government has been pressing the Indian government to open up the e-commerce sector to foreign investors. U.S. companies such as Amazon and eBay have been lobbying hard for it both in the U.S. and India, and, in the past, have met Commerce and Industry Minister, Anand Sharma, on the issue a number of times,” the official said.
The Government had allowed 51 per cent FDI in multi-brand retail stores in September last year, but categorically stated that foreign investments would not be allowed in e-commerce.
The answer to that business problem, of course, was changing India’s government — even if that meant installing a brutal figure like Narendra Modi, who spent nearly a decade on the US State Department’s visa ban list for his role in the violent persecution of minority Muslims and Christians.
That’s terrible and all from a human rights perspective, but when you consider the interests of eBay’s shareholders — like its number one shareholder, Pierre Omidyar — India presents not so much a problem as an opportunity. The majority of eBay’s revenues come from its overseas operations, and eBay has made no secret that it sees its future growth coming from India and the BRIC countries (Brazil, Russia, India, China).
Earlier this year, eBay upped its investment into one of India’s top e-commerce firms, Snapdeal, investing another $134 million on top of the $50 million invested in 2013. It was yet another sign of how important India is to eBay’s future growth.
When eBay upped its investments in February, eBay senior vice president Jay Lee commented:
“Accelerating growth in India and other emerging markets continues to be a core strategy for driving eBay’s global e-commerce leadership. eBay is excited about the prospects ahead for both, Snapdeal and the eBay India business.”
Indeed. No one could be happier than eBay’s largest shareholder, Pierre Omidyar. His many fans in the media and the liberal-left community who’ve been singing the billionaire’s praises might find this latest development depressing — Omidyar profiting off far-right authoritarianism — but the upside is, if Modi comes through, there’ll soon be more billions for Omidyar to wave before the remains of America’s independent journalism community.
(Special thanks to Aditya Velivelli for helping educate me about India’s complex politics and social fabric—M.A.)