Parliament informed that government has not assessed impact of Walmart Flipkart deal

By

Isabelle Crossley

Published
Jul 31, 2018

On July 30, Parliament was informed that the government has not yet assessed the full possible impact of the Walmart- Flipkart acquisition deal but Minister of State for Commerce C.R. Chaudhary assured that the Foreign Exchange Management Act  covers foreign direct investment policy regulations.

The Minister of State for Commerce C.R. Chaudhary wrote a reply to the Lok Sabha (Parliament of India) that stated that, despite protests arguing the Walmart- Flipkart acquisition deal will harm Indian traders, FDI in retail is only allowed in a calibrated manner. Chaudhary assured that intensive consultations with stakeholders such as state governments, ministries, and relevant organisations are considered in the process.

However, the Confederation of All India Traders has continued to oppose the deal that would see Walmart acquire a 77 percent stake in Flipkart and maintains that proper checks have not been carried out. The deal, which is valued at around $20.8 billion (Rs 1.4 lakh crore), would be the business’ largest acquisition to date.

"Suggestions and views received from various stakeholders and public on various aspects of FDI regime are examined before taking appropriate action," said Chaudhary. "However, any violation of FDI policy regulations is covered by the penal provision of the FEMA, 1999."

The government is currently working on a draft national e-commerce policy and CAIT is demanding that this be completed before the Walmart-Flipkart deal goes through. The proposed policy will soon be disseminated for public comment.