Walmart-Flipkart Deal: Local Indian traders up in arms

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A clown sits inside a bus seen in front of a Wal-Mart store in Mexico City January 11, 2013 Reuters

Reflecting the sentiment across the local traders in India, the Confederation of All India Traders (CAIT) on Thursday sought a ban on the deal.

Just two days after the deal was announced, right-wing activists from Swadeshi Jagran Manch, a wing of Hindu nationalist organisation Rashtriya Swayamsevak Sangh (RSS), protested on the roads of New Delhi, shouting slogans such as "Go back Walmart", reminiscent of "Go back Simon", a popular anti-British slogan during the country's freedom struggle.

The traders' body said it might approach the Competition Commission of India (CCI) once the Walmart-Flipkart agreement details are analyzed. CAIT Secretary General Praveen Khandelwal said the body is studying the deal and may seek legal options based on the structure of the deal before approaching the competition commission.

CAIT said that Walmart-Flipkart deal will be a potential blow to massive Indian retail trade, it said, close on the heels of the May 9 deal announced by Walmart Inc that it was buying 77 percent equity stake in India's largest e-commerce retailer Flipkart for $16 billion.

Khandelwal said the deal has greater ramification on India's retail trade. "Whoever controls the platform controls the data and digital intelligence... Being the controller of the company, Walmart may use the data and other information as per its will and wish and the possibility of compromising the data cannot be ruled out," he said.

As a virtual owner of both market intelligence and seller, Walmart may position itself in a position to dictate its terms and conditions, he explained bringing out the anomalies in the new deal between the two global behemoths. Moreover, "it is much more difficult for the government to control and regulate foreign-owned platforms particularly in e-commerce sector which has no boundaries", Khandelwal pointed out.

Walmart cannot open physical stores in India owing to local rules which restrain single-brand retail trade by MNCs. However, Walmart is keen to float a Franchisee model jointly to open stores on the lines of Metro Cash and Carry, a German retailer.