May 10, 2018
Walmart-Flipkart deal faces opposition from traders
May 10, 2018
Walmart’s deal with Flipkart to acquire 77 per cent stake in the Indian e-commerce website is facing opposition from traders, while industry body ASSOCHAM has termed it as a success of Indian start-ups. The Confederation of All India Traders (CAIT) believes that the deal is Walmart’s attempt to control and dominate the retail trade in India via e-commerce.
Swadeshi Jagran Manch (SJM) an affiliate of RSS said in a letter to the Prime Minister that that the American retailer is circumventing rules to make a back-door entry in India. It added that the deal could create problems for SMBs, small shops and small entrepreneurs, who are already facing problems.
Retailers Association of India (RAI) said that e-retail companies have been violating FDI policy for marketplaces in India, according to media reports.
Walmart’s digitally powered e-channel will vitiate the retail and e-commerce market, resulting in an uneven level playing field, said CAIT in a statement. The deal will only benefit investors, venture capitalists and promoters.
Praveen Khandelwal, secretary general of CAIT, added that a national policy for e-commerce should immediately be framed and a regulatory authority should be constituted to regulate e-retail business in India. He also said that until the authority is constituted, the government should scrutinise the deal.
RAI has also asked the government to ensure complete adherence to the FDI policy of India. E-commerce companies are directly and indirectly offering discounts, thus creating an uneven level playing field.
On the other hand,, ASSOCHAM secretary general D S Rawat said that is great that an Indian start-up has fetched an enterprise valuation of $21 billion, making the Walmart-Flipkart deal the largest FDI in India.
The deal presents India as an attractive investment destination and proves the maturity and viability of the start-ups and e-commerce sector of India, said Lalit Bhasin, senior vice president of Indo-American Chamber of Commerce (IACC).
As for the PHD Chamber of Commerce and Industry, it said that this deal will lead to new opportunities in the e-commerce sector and its growth.
Walmart will pay approximately $16 billion for an initial stake of approximately 77 per cent in Flipkart, subject to regulatory approval in India. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
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