Walmart-Flipkart Deal Faces Allegations Of Causing ‘Irreversible Damage’ To Small Traders

This is not something unexpected. With global behemoths Walmart and Amazon wrestling for as big a share of the Indian ecommerce marker as possible, a group of over 100 trader organisations on Monday (June 4) showed their concerns about the survival of small traders in such a scenario.

According to an ET report, the traders alleged that the Walmart-Flipkart deal will cause “irreversible damage to small traders and endanger the jobs of thousands. Associations such as the Centre of Indian Trade Unions (CITU) and the All India Kisan Sabha (AIKS) called for the deal’s nullification.

The associations have further issued an open statement highlighting the deal’s “multifaceted dangers” to the economy. The arguments were centered around the expected monopoly of the US-based companies in the Indian retail market as well as access to sensitive consumer data by these MNCs.

“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 said. “The worst affected will be small brick-and-mortar retail stores along with SMEs and suppliers of goods including farmers,” he added.

In India, 100% foreign direct investment (FDI) is allowed in ecommerce for marketplaces. As many as 127 groups have now come together to oppose the Walmart-Flipkart deal. Other signatories also include networks like National Fishworkers Forum and National Hawker Federation.

Reports also surfaced on Monday that the Department of Industrial Policy and Promotion (DIPP) has now forwarded to various government agencies complaints made by RSS-affiliated Swadeshi Jagran Manch (SJM) over the Walmart-Flipkart deal.

Prior to this, the All India Online Vendors Association (AIOVA) and the Confederation of All India Traders (CAIT) approached the Competition Commission of India (CCI) stating that the Flipkart-Walmart deal will create unfair competition and an uneven level playing field for domestic players.

Further, on the policy front, reports surfaced that the Indian ecommerce think tank, headed by commerce minister Suresh Prabhu, may finalise the policy framework on the sector in the next six months.

The framework will deal with ecommerce sector issues like physical and digital infrastructure, regulatory regime, taxation policy, data flows, server localisation, intellectual property rights protection, and FDI, among others.

With stakeholders in the $16 Bn Walmart-Flipkart deal now busy in tax analyses with the Indian Income Tax authorities, it seems the traders’ associations have been a bit late to join the protests.

Also, with one of India’s ecommerce unicorns (Flipkart) now in the Walmart camp, the US retailer can’t be expected to leave the battleground. What will this ‘swadeshi’ movement of Indian trader organisations lead to in near future only time will tell.