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RSS-affiliated body stages protest against Walmart-Flipkart deal

11 May, 2018, 04:47 | Author: Shawna Walton
  • Walmart store. Credit Diego M. Radzinschi ALM

Flipkart, India's largest e-commerce company, has chose to sell a. "It is much more hard for the government to control and regulate foreign owned platforms and all indigenous players will have no value if a foreign company runs the platform", Khandelwal has claimed.

Monumental. That's how Accel Partners described portfolio company Flipkart's $16 billion acquisition by U.S. retail giant Walmart Inc.

With the Walmart deal, however Sachin Bansal stands to attain his billionaire status again, as he will offload his entire 5.5% stake in the company to Walmart, earning him about $1 billion, Bloomberg reported.

The deal is expected to close later in 2018, subject to regulatory approval. McMillon has led Walmart's efforts to boost global business.

"This investment is of enormous importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India", said Binny Bansal, one of the original founders of Flipkart. Walmart has revealed it will pay $16bn for a 77 percent stake in the Indian e-retailer.

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). So far it had been handicapped by India's retail policy that does not allow overseas companies to sell directly to consumers (except in wholesale cash-and-carry segment). In competition with Walmart, Amazon made an offer to buy 60% of Flipkart's share to get the majority of ownership as compared to Walmart.

It is "a clear attempt to control and dominate the retail trade of India by Walmart", the Confederation of All India Traders said, adding that the deal would encourage predatory pricing, hurt Indian businesses and create an uneven playing field.

Amazon is the cloud leader, but number-two cloud provider Microsoft, which invested $1.4 billion in Flipkart alongside eBay and Tencent a year ago, is now Flipkart's exclusive cloud provider. "This investment aligns with our strategy and our goal is to contribute to India's success story, as we grow our business". Big players like Sequoia Capital had passed up on the opportunity to invest in Flipkart several times.

In this case, apart from domestic income tax laws, articles from a number of income tax treaties signed by India with the US, Singapore, Mauritius, South Africa, and a comprehensive agreement with China will also be invoked.

"A company like Walmart shown interest only after they smelled huge business opportunities in the Indian e-commerce market through Flipkart. Most of these small entrepreneurs are already battling for their existence; entry of Walmart will further create problems for them", the co-convenor of the manch said in a letter to the prime minister.



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