July 2, 2018
About 10 lakh traders will today launch a country-wide protest against the multi-billion dollar deal between US-based Walmart and Flipkart. Traders believe that the e-commerce giant will vitiate the markets by indulging into all kinds of malpractices including predatory pricing, deep discounting and loss funding . Earlier in May, Flipkart struck a deal with Walmart to sell its 77 per cent stake in USD 16 billion.
The Confederation of All India Traders or CAIT is against the merger as it claims that the entry of US retail giant in India will create an unfair competition and hit small traders on offline platform. CAIT Secretary General Praveen Khandelwal recently claimed that at a time when there is no policy for e-commerce, it would be a cake walk for Walmart to circumvent the country’s FDI policy.
The traders’ body has challenged the deal in the Competition Commission of India – an authority which is yet to approve the Walmart-Flipkart merger. Before approaching to CCI, the CAIT wrote two letters to Commerce Minister Suresh Prabhu to express the business community’s concerns. In one of its letters, the CAIT called Walmart ‘a US version of The East India Company’. In the letter, it said: “Walmart is nothing but a US version of The East India Company which conquered the country.”
The CAIT fears that Walmart will penetrate the retail trade through e-commerce and indulge in predatory pricing with deep discounting which will eventually create an uneven playing field for domestic players. “It will source globally the cheapest material and will dump in the country to wipe out the competition. As of now, no rule or law exists which can put restrictions on such practises of any company,” the letter had stated.
The body has also accused the US retail giant of having hidden agenda and said that the deal will “offend FDI policy once it is implemented and will create an uneven level playing field beside accomplishing hidden agenda of Walmart to reach out to offline trade through e-commerce way”.
It further demanded that a national policy for e-commerce be framed at the earliest and a regulatory authority be constituted to regulate the online retail business in India. “…and till such time, the deal should be put in abeyance by the Government and a close scrutiny should be held in the entire deal,” it had said.