Even as Walmart and Flipkart must be busy working out the modalities for the transition of ownership from Flipkart to the US giant, the apex traders’ body in India is ready to put spokes in the deal. The Confederation of All India Traders (CAIT) is holding its National Traders’ Conclave and the event will be attended by senior Union ministers, Nirmala Seetharaman, Suresh Prabhu and Smriti Irani. CAIT says they will impress upon the ministers in the Modi cabinet that the deal if it goes through will be highly detrimental to the interests of the small traders in the country and therefore the government must withhold the permission to Walmart to takeover Flipkart. The Secretary General of CAIT, Praveen Khandelwal has gone a step further and said CAIT will approach the Supreme Court of India to stop the deal from being formalised.
As of now, Walmart’s application to acquire 77% share of Flipkart is pending with the Competition Commission of India (CCI) for approval. While Khandelwal and CAIT claim that Walmart’s entry into retailing is in violation of the FDI rules which do not permit foreign direct investment in retail, Walmart has issued a statement that its acquisition of Flipkart is well within the policy guidelines on ecommerce sector in India and it has not violated any tenet of the law or the policy.
Walmart has added that its business is helping in creation of thousands of jobs and its practice of buying goods from the small and medium enterprises in India is also benefitting many here. Walmart is said to be procuring 95% of its requirements for its Best Price stores from India.
Walmart has also clarified that the cash & carry business it is running in India will run as a separate entity and it has plans to expand there as well.
CAIT is not only strongly against the deal but says its legal team is ready with the papers and documents to file a petition in the Supreme Court if the government goes ahead and accords its approval to the deal.