Traders threaten to fight Flipkart-Walmart deal in Supreme Court
03 July 2018
Traders affiliated to the Confederation of All India Traders (CAIT) have threatened to file a petition against the proposed acquisition of Indian e-commerce major Flipkart by US retail giant Walmart Inc that, they say, would create a retail giant in India to the detriment of India’s largely unorganised traders and shopkeepers.
Traders and shopkeepers, dead set against Walmart’s $16-billion acquisition of Flipkart, have decided to move the Supreme Court to defend their interests if the Competition Commission of India (CCI) rules in favour of the deal and the government fails to block the transaction.
They say the proposed buyout of Flipkart would create an entity that has a monopoly-like position in both the offline and online retail business in India, even as Walmart argued that the proposed merger is in line with the country’s FDI regulations.
Arguing that the deal would drive small and medium-sized offline retailers and traders out of business, thousands of shopkeepers and traders affiliated to CAIT staged protests across the country.
Praveen Khandelwal, secretary general of CAIT, said the traders’ body had sought an appointment with the commerce ministry to discuss the matter and push for the deal to be blocked.
“We have been expecting the government to reject this deal, but so far, we haven’t heard from them... We will fight this deal tooth and nail, and, if necessary, take this matter to the Supreme Court,” the Mint quoted Khandelwal as saying.
CAIT had in May filed a petition with antitrust regulator CCI, objecting to the Walmart-Flipkart deal on the grounds that the buyout creates an uneven playing field for sellers.
In its presentation to CCI, Walmart had said the transaction would not create any competition concerns and that the pecking order of the broader retail market in India would remain unaffected by the deal.
India currently allows 100 per cent foreign direct investment in e-commerce firms that operate on an online marketplace-based model and most analysts and experts expect the deal to go through.
Walmart also said it remained confident that the deal would go through and that the combination of Walmart and Flipkart would actually create more jobs and provide benefits to small suppliers and farmers.
“We believe that the combined capabilities of Flipkart and Walmart will create India’s leading e-commerce platform. This will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers, and women entrepreneurs...At the same time, Walmart will continue to focus on agri supply chain investment to help rural farms generate more income — particularly for small farmers — mainly due to improvement in farming techniques, increased access to markets and less food waste in the value chain from farm to fork,” said Walmart in a statement on Monday.