Walmart-Flipkart deal unfortunate, will kill ‘Make in India’ dream: Swadeshi lobby to PM

Flipkart

Barely a day has passed since US retail behemoth Walmart’s deal with Indian online retailer Flipkart, and lobby groups are already raising concerns. There are views expressed that the deal might eat up SMEs and hurt government’s ‘Make in India’ programme.

RSS-affiliated Swadeshi Jagran Manch wrote to India’s Prime Minister Narendra Modi and sought his intervention to stop US retail giant entering India.

“Walmart is using the e-commerce route to circumvent the rules to attack Indian market through a backdoor entry into multi-brand retail space,” SJM said in its letter to the PM.

He alleged that entry of the US retail giant will eliminate the small and medium businesses, small shops, and opportunity to create more jobs.

The letter also raised questions of Flipkart’s operations. Its group companies have not filed their statement of accounts for the financial year 2016-2017, 2015-2016 and have only made partial disclosures, it added.

This is not the first time SJM has opposed the foreign investment in India. In August last year, SJM had appealed to the government to disallow investment in companies such as Paytm, which are getting funding from China.

Too much of foreign investment coming from China will create situation alike Srilanka, where the country is forced to give away its airport in exchange for debts. Paytm is not a domestic initiative because more than a majority portion is being owned by
Alibaba and other Chinese firms, SJM Co-Convenor Ashwani Mahajan had said.

Meanwhile, the long-anticipated Walmart-Flipkart deal was brewing for some weeks and officially announced yesterday.

On Wednesday, Walmart signed definitive agreements to pick up an initial stake of 77 per cent in Flipkart, valuing the e-commerce giant at just over $20.8 billion. Flipkart co-founder Binny Bansal, Tencent Holdings Ltd of China, Tiger Global Management LLC and Microsoft Corp will hold the remaining 23 per cent.

The Arkansas-based retailing behemoth, which reported total revenues of $500 billion in 2018, will now become the largest shareholder in the Flipkart Group.

Walmart strategy in India has been hampered by tough regulations that bar foreign investment in multi-brand retail, which is why it started discussions with Flipkart almost two years ago.

Ending its relation with Flipkart, eBay also will sell its holdings in the e-tailer.

The development was first reported by The Hindu.

Comments

LEAVE A REPLY

Please enter your comment!
Please enter your name here