The Confederation of All India Traders or CAIT has sought “immediate intervention” by the government in the proposed acquisition of Flipkart by U.S.-based Walmart, claiming that the deal would encourage predatory pricing and malpractices in the e-commerce sector.
‘Finalise policy’
In a letter to Commerce and Industry Minister Suresh Prabhu, the industry body said that the deal should not be allowed till India finalises a policy for the e-commerce sector.
“Since there is no policy or rule for e-commerce as of now, such deals will run contrary to the interests of India’s retail trade… e-commerce business is already gripped with predatory pricing, loss of funding. The scenario after the Walmart-Flipkart deal will be worse than ever for both offline and online traders,” Praveen Khandelwal, national general secretary, CAIT, said in the letter dated May 7. He added that the deal would further create an uneven level-playing field, giving rise to unhealthy competition where traders — both online and offline — would not be able to compete.
He added that a regulatory authority should be set up for the sector and all deals should be approved by such an authority.
Sellers’ assent
The traders’ body demanded that the government make it mandatory that such deals take place only when 75% of the sellers on an e-platform give their assent since they would be the worst sufferers.
“It is really unfortunate that in spite of having a clear FDI policy, foreign companies are finding an escape route whether in retail or e-commerce… Walmart, after failing to enter India in retail sector through FDI, has chosen the e-commerce route, which will be quite harmful for the trading community,” the industry body said in the letter.
