Bhubaneswar: Amid RSS-affiliate Swadeshi Jagran Manch opposing the Flipkart buyout, young entrepreneurs from Odisha gave a thumbs up to the jaw-dropping deal which with the U.S. retail giant buying 77 per cent stake for United States dollars 16 billion (Rs 1.04 lakh crore) in the Bengaluru-based e-commerce company.
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Right after Walmart’s announcement to buy 77 percent stake in Flipkart for 16 billion Dollars, eBay announced it is severing business relations with Flipkart.
“This is a big wake-up call for large Indian corporate houses”.
“Treaty provisions will not apply on indirect transfers that have Indian assets as underlying”, said another official, referring to double taxation avoidance agreements, in this case, the one between India and Singapore.
The deal, he said, will also have positive impact on FDI investments into the country.
Walmart said it would support small business and “Make in India” through direct procurement as well as provide increased opportunities for exports through global sourcing and e-commerce. “It is to be noted that nowhere in the world, Walmart has a marketplace model”, Mahajan has conveyed his concern over the Flipkart deal to the prime minister. They (Walmart) are a brick-and-mortal company, by and large.
Chirag Haria, founder of Aarogyam Energy Jewellery, a top jewellery seller on Flipkart, said the seller community is somewhat anxious about Walmart’s private labels. While investors, promoters, as well as the entire ecosystem, are celebrating the unprecedented deal, employees of the Bengaluru-based firm are not happy with the ESOPs buyback policy.
Meanwhile, Amazon is also still fighting hard in India, with founder Jeff Bezos crowing last month that Amazon.in had the most-downloaded shopping app in India for 2017.
“While Amazon has AmazonNow, Flipkart would like to tap Walmart’s supply chain expertise in building up its Grocery offerings”. This could lower its stake although Walmart plans to retain majority control.
Walmart is already calculating how much tax they need to pay to the Indian Govt., even as Sachin and Binny Bansal are readying to cough up 20% capital gains tax on their billions of dollars which they received. With Flipkart in its bag, Walmart has a head start in India and can hit the ground running in its fight with Amazon.
Separately, a traders’ union, the Confederation of All India Traders (CAIT) said that it may consider taking legal action against the two companies or lodging a complaint with the country’s competition watchdog, depending on how the deal was structured. “There will be cent per cent rise in Flipkart’s brand value with the brand becoming more credible”, said an expert from the authenticity.
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In order to allay these fears following the hotly-anticipated $16-billion deal announced on Wednesday, Flipkart chief executive Kalyan Krishnamurthy reached out to the seller community, saying there would be no changes in operating processes as a result of the investment.
