According to CAIT, its team of lawyers is studying the deal.
The confederation has described the agreement as “circumventing laws and will offend FDI policy once it is implemented and will create an uneven level playing field beside accomplishing hidden agenda of Walmart to reach out to offline trade through e-commerce way”.
“Government should closely monitor each passage of the deal since its not a merger of two companies but will have greater ramifications on retail trade and economy,” the confederation said in a statement.
“There has to be a policy for such deals otherwise in lust of bigger profit several such deals will happen in future and will be a bad precedent… Slowly and gradually the Indian retail trade will be controlled and dominated by the MNCs and an era of predatory pricing, deep discounting and loss funding will prevail to wipe out the competition which will create an unhealthy market.”
Besides the threat to retail trade, CAIT said that the deal pertains to important issues like “FDI policy, data security, competition, unfair practices…”
On May 10, CAIT Secretary General Praveen Khandelwal told IANS: “We are studying the deal and may resort to legal options based on the structure of the deal.”
Asked about the legal options, he said that CAIT might approach the Competition Commission of India (CCI) to seek “a ban” on the deal after studying the metrics of the agreement.
On May 9, global retail giant Walmart Inc announced it was buying 77 percent equity stake in the country’s largest e-tailer Flipkart for US $16 billion, subject to regulatory approval in India.
The acquisition of the majority stake makes the US $500 billion Walmart the largest shareholder of Flipkart group and will help accelerate its mission to transform e-commerce through digital technology.