Walmart had acquired 77 per cent stake in Flipkart for about $16 billion in August last year.
Looks like not everyone is quite happy with the recent changes in India’s FDI policy for e-commerce firms! US retail major Walmart has expressed its disappointment over the recent changes and said that it was hopeful of a collaborative regulatory process which results in a level-playing field.
The retailing giant that has recently invested USD 16 billion in the Indian e-commerce company Flipkart, said that the changed norms have however not deterred the company’s confidence. Walmart said that it was optimistic about the e-commerce opportunities in India.
The Indian government has tightened the norms for e-commerce firms having FDI holdings. The new rules which were made effective from February 1 prevent online marketplaces like Flipkart and Amazon from selling products of such companies in which they have a stake. The new norms also put a ban on making exclusive marketing arrangements to influence the price of products.
“The things that have happened have been disappointing in some ways, but they haven’t shaken our confidence and excitement about what this is going to mean to the company long term”, media reports quoted Executive Officer and Director C Douglas McMillon as saying during a meeting with analysts.
“And this isn’t a story about one quarter or even one year. We hope to have an effective, productive dialogue as it relates to future changes that happen. But in terms of how the business has behaved, it’s in line with what we thought it would be,” he added.
He also expressed that the company was hopeful of working with the Indian government for pro-growth policies that will lead to the development and prosperity of the domestic manufacturers, farmers, and suppliers that benefit from the e commerce industry.
Talking about whether the recent regulatory changes will influence Walmart’s investment posture in India, McMillon said that the company was still excited about the market.
“All the reasons we cited for going into India and acquiring Flipkart, when you look at the continued e-commerce growth in India, the size of the market, the growing middle class, all those things are still as true today as they were six months ago. So the reasons we’re excited about the market are still there”, he was quoted as saying.
Walmart had acquired 77 percent stake in Flipkart for about $16 billion in August last year. The deal paved way for the US retailer in the Indian e commerce market.