Business Companies 05 Jun 2018 Walmart-Flipkart dea ...

Walmart-Flipkart deal to endanger jobs: Trade unions

FINANCIAL CHRONICLE
Published Jun 5, 2018, 8:52 am IST
Updated Jun 5, 2018, 8:52 am IST
As many as 127 groups have now come together to oppose the Walmart-Flipkart deal.
In India, 100 per cent foreign direct investment (FDI) is allowed in e-commerce for marketplaces.
 In India, 100 per cent foreign direct investment (FDI) is allowed in e-commerce for marketplaces.

New Delhi: Over 100 trade organisations on Monday opposed the $16-billion Walmart-Flipkart deal, stating that it would cause “irreversible damage” to small traders and endanger jobs for thousands.

The associations, including Centre of Indian Trade Unions (CITU) and All India Kisan Sabha (AIKS), released an open statement highlighting the deal’s “multifaceted dangers” to the economy, and called for its nullification.

 

The bodies also argued that allowing the deal to go through would create an American duopoly (Walmart and Amazon) in the Indian retail sector and also lead to control of consumer data by these multi-national corporations (MNCs).

“Walmart is well-known for its global supply chain, especially of cheap goods from China, which will hurt local manufacturers and suppliers. The worst affected will be small brick and mortar retail stores along with SMEs and suppliers of goods including farmers,” said Mohan Gurnani, president, Chamber of Associations of Maharashtra Industry and Trade (CAMIT).

Last month, Walmart had announced the acquisition of 77 per cent stake in Flipkart for about $16 billion (Rs 1.05 lakh crore) -- marking the largest e-commerce deal so far in the country. In India, 100 per cent foreign direct investment (FDI) is allowed in e-commerce for marketplaces.

As many as 127 groups have now come together to oppose the Walmart-Flipkart deal.

Walmart India chief corporate affairs officer Rajneesh Kumar said the company is committed to India for the long term. “We have been running Cash and Carry business in India for almost a decade now and helping small kiranas succeed and become modern. We are sourcing locally with more than 95 per cent merchandise coming from within the country,” Kumar said.

He countered allegations that the deal would lead to job losses, saying the transaction will in fact lead to creation of lakhs of new jobs and help thousands of local suppliers and manufacturers access the consumers through Flipkart’s marketplace model, where the government has allowed 100 per cent FDI.

When contacted, Flipkart did not respond to the query.

The unions were of the view that if the deal was allowed, two American retail giants -- Walmart and Amazon (which is present in India through a marketplace model) -- could create a ‘duopoly’ that would be too powerful to be regulated. They also urged the BJP government -- which had strongly opposed Walmart's entry into India -- to frame an e-commerce policy (which is in the works) before allowing the deal.

Members of the panel alleged that e-commerce firms seek to own and control key data of consumers and warned against misuse of such data in today's digitally empowered society. 

Amitava Guha from CITU said Walmart has a long history of being anti-trade union and disregarding social security laws, and added that even if Walmart and Amazon employ a few thousand more, they are unlikely to neutralise the massive unemployment loss associated with the collapse of the smaller retailers in the country.

Earlier, bodies like Confederation of All India Traders (CAIT) and All India Online Vendors Association (AIOVA) moved the Competition Commission of India (CCI) against the deal.

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Location: India, Delhi, New Delhi




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