Flipkart deal in line with govt's FDI policy, says Walmart

US retail giant Walmart on Monday said its proposed $16 billion acquisition of Flipkart was in accordance with the government's FDI policy even as local shopkeepers and traders continued their protest against the deal. The Confederation of All India Traders (CAIT) organized mass sit-in protests across cities such as Delhi and Mumbai against the deal on Monday.

The traders body fears Walmart's buyout of Bengaluru-based Flipkart will create a monopoly in the retail market and drive mom-and-pop stores out of business. CAIT has been urging the government to scrap the deal and constitute a regulatory authority to monitor the country's e-commerce market.

Walmart, which currently runs 21 cash-and-carry stores in India said it has been supporting local manufacturing in India by sourcing from small and medium enterprises, 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.

"A clear testament of that is showcased in our merchandise 95 per cent of which come from within the country," the statement added. The company further said, "We believe 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."

However, CAIT secretary general Praveen Khandelwal staunchly opposed the merger of the two companies alleging that Walmart, which is the world's largest retailer will indulge in predatory pricing, deep discounts and loss funding to drive competitors out of business. The trader's body said that the deal is bound to circumvent established laws and FDI policy of the government. It said if the issue is not addressed immediately, traders will decide on the future course of action in CAIT's national convention to be held in Delhi from July 23-25.