Walmart is facing opposition to its US$16 billion deal to acquire Flipkart, with shopkeepers and traders affiliated with the Confederation of All India Traders (CAIT) kicking off protests around the country.
Reuters, citing the trade group that organized sit-ins starting Monday, July 2, reported protesters contend the deal will create a monopoly in the retail industry and drives small mom-and-pop stores under. In an interview with Reuters, Praveen Khandelwal, the secretary general of CAIT, said about one million people are expected to take part in the protests, which are expected to happen in hundreds of cities including Mumbai, the financial hub of India. Protests are also slated for Gujarat, the home state of India’s Prime Minister Narendra Modi. “This is the first phase of our protest. And if the government doesn’t listen, we will decide our future course of action at our national convention in Delhi later this month,” Khandelwal said in the interview. One witness told Reuters that a sit-in taking place in Delhi, the home base of the trade group, lured around 50 traders and shopkeepers by noon. Meanwhile, in Guwahati, a main city in the northeastern Assam state, around 300 traders came out to protest the deal between Walmart and Flipkart.
For its part, Walmart said that it has been supporting local manufacturers by sourcing from small and medium-sized suppliers. Walmart already runs 21 cash-and-carry stores in the country, noted the report. “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 to Reuters.
For Flipkart, the deal gives it a valuation north of US$20 billion, a promise of US$2 billion in fresh investment from Walmart and “additional potential investors,” as Walmart CFO Brett Biggs noted. Analysts also noted that the Indian firm could leverage its new parent and Walmart’s extensive nationwide network of wholesale outlets, to accelerate its planned expansion into the grocery market.
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