MUMBAI: A lobby group of small Indian traders and shopkeepers has asked tens of thousands of its members to hold protests across the country on Monday against Walmart Inc’s proposed $16 billion acquisition of e-commerce firm Flipkart.
The Confederation of All India Traders (CAIT) says the U.S. retail giant’s buyout of Bengaluru-based Flipkart will create a monopoly in the retail market and drive small store-owners out of business.
Praveen Khandelwal, the secretary general of CAIT, told Reuters he expected a million people in all to join Monday’s sit-in protests across hundreds of Indian cities.
“This is the first phase of our protest. And if the government doesn’t listen, we will decide our future course of action at our national convention in Delhi later this month,” Khandelwal said.
Bentonville, Arkansas-headquartered Walmart in May announced it was acquiring roughly 77 percent of homegrown Flipkart, a deal which now awaits the approval of India’s anti-trust regulator.
Multiple sources and lawyers close to the deal have previously told the media that while the Competition Commission of India will consider all arguments, the CAIT did not pose a challenge to the acquisition.
Walmart, which currently runs 21 cash-and-carry stores in India, said on Monday it had been supporting local manufacturing in India by sourcing from small and medium suppliers, farmers and businesses run by women.
“Our partnership with Flipkart will provide thousands of local suppliers and manufacturers access to consumers through the marketplace model,” Rajneesh Kumar, senior vice president, Walmart India, said in a statement.
The traders will also approach the district collector or magistrate of the area and submit a memorandum.
The memorandum states that the deal between Flipkart and Walmart has several important issues concerning the FDI Policy, data security competition, and unfair practices. CAIT says that since the deal has greater ramifications on India’s retail trade, a ‘close scrutiny’ is warranted.
“The Walmart Flipkart deal will prove to be a nightmare for retail trade and economy of the country. There will be enormous job losses and an uneven level playing field will be created with such deals. It’s an open fact that in the US, Europe etc, the financial lending entails an interest rate from 1.5 to 2.5 percent only whereas in India, banks lend at interest rates ranging from 12 percent to 20 percent per annum. This difference in interest rates in itself is enough to kill the domestic trade. The Govt should take steps to bridge the gap for maintaining level playing field and to encourage healthy business practices in the country,” the mandate states.
CAIT is demanding the government to immediately frame a national policy for e-commerce and constitute a Regulatory Authority to control e-commerce business in India. Till such time, it wants the government to hold the deal in abeyance.
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