Nearly 10 lakh traders will protest at about 1,000 places across the country today against US retail giant Walmart’s proposed acquisition of 77 percent stake in home-grown retailer Flipkart in a USD 16-billion deal, according to media reports.
Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal alleged that the
“e-commerce marketplace has been vitiated to a great extent in past years by several leading e-commerce companies by indulging into all kinds of malpractices including predatory pricing, deep discounting and loss funding”.
Prior to this, the All India Online Vendors Association (AIOVA), which represents over 3,000 online sellers, filed a petition with the CCI against Flipkart for giving ‘preferential treatment’ to a few seller entities and thus enabling steep discounts on its platform.
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Khandelwal has pointed out that an absence of a policy for e-commerce would make it a cake walk for Walmart to circumvent the FDI policy Press Note No 3 of 2016. He said CAIT has already filed their objections in Competition Commission of India and if the need arises it shall challenge the deal in the court of law.
“However, we expect the government to intervene and take suitable action in accordance with various announcements of Prime Minister Narendra Modi to uplift small businesses in the country. This deal will directly affect small traders of the country who will not be able to compete with Walmart,”
Khandelwal said.
The commerce and industry ministry notifies FDI policies through press notes. Press Note 3, which was released in 2016, enlists guidelines for foreign direct investment in the e-commerce sector. It also articulated that no discounting is allowed and that no inventory ownership directly or indirectly is allowed by e-commerce marketplaces.
Meanwhile, Walmart has given itself time till June 7, 2019, to close the deal, failing which it will have to repay a significant portion of the bond issue although the Bentonville-based retailer remains confident of completing the transaction before the end of 2018. A March 9, 2019 deadline had been set in the share purchase agreement between the two companies around which the termination rights have been negotiated, as per a regulatory filing made in May.
“Walmart is working with the authorities in India and we are hopeful of timely approval. We are still expecting closing later this calendar year, subject to regulatory approval,”
a Walmart spokesperson reportedly said.
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