The advocate for small traders and businesses in India Confederation of All India Traders (CAIT) has threatened nationwide agitation if the government clears USD 16 billion Walmart-Flipkart deal.
“Since last five years we are knocking the doors of the government for bringing reforms in e-commerce but all has gone to deaf ears which encouraged Walmart to buy Flipkart and enter into retail trade indirectly,” CAIT said in a statement.
The deal will increase malpractices manifold in e-commerce spectrum, it said. The basic fundamentals of the deal are based on circumvention of the law with an underlying object to exploit, manipulate and control the retail sector including e-commerce, it added. Last month, the US retailer Walmart Inc announced the acquisition of 77 per cent stake in Flipkart in its biggest takeover till date. The deal values the 11-year old Indian e-commerce firm at USD 20.8 billion.
Over 100 trader organisations last week opposed the USD 16-billion Walmart-Flipkart deal stating it would cause irreversible damage to small traders and endanger jobs for thousands. The associations, including Centre of Indian Trade Unions and All India Kisan Sabha, released an open statement highlighting the deal’s multifaceted dangers to the economy, and called for its nullification.
The bodies also argued that allowing the deal to go through would create an American duopoly (Walmart and Amazon) in the Indian retail sector and also lead to control of consumer data by these multi-national corporations.
“Walmart is well-known for its global supply chain, especially of cheap goods from China, which will hurt local manufacturers and suppliers,” Chamber of Associations of Maharashtra Industry and Trade President Mohan Gurnani told reporters here. “The worst affected will be small brick and mortar retail stores along with SMEs and suppliers of goods including farmers,” he added.
As many as 127 groups had earlier come together to oppose the Walmart-Flipkart deal. Other signatories also include networks like National Fishworkers Forum and National Hawker Federation. Walmart India chief corporate affairs officer Rajneesh Kumar had said the company is committed to India for the long term.
He said that Walmart has been creating skilled local jobs for the youths in the country and is also sourcing several billion dollars worth of products that made in India as part of global sourcing office. He countered allegations that the deal would lead to job losses saying the transaction will, in fact, lead to creation of lakhs of new jobs and help thousands of local suppliers and manufacturers access the consumers through Flipkart’s marketplace model, where the government has allowed 100 per cent FDI. Kumar emphasised that the two entities (Flipkart and Walmart) will continue to operate independently.
The unions were of the view that if the deal was allowed, two American retail giants — Walmart and Amazon (which is present in India through a marketplace model) — could create a duopoly that would be too powerful to be regulated. They also urged the BJP government — which had earlier strongly opposed Walmart’s entry into India — to frame an e-commerce policy (which is in the works) before allowing the current Walmart-Flipkart deal.
Members of the panel alleged that e-commerce companies like Amazon and Walmart seek to own and control key data of consumers and warned against misuse of such data in today’s digitally-empowered society.
Earlier, bodies like CAIT and All India Online Vendors Association moved the Competition Commission of India against the deal.