Amazon Beaten By Walmart In Battle For India's Flipkart

  • Amazon Beaten By Walmart In Battle For India's Flipkart

Amazon Beaten By Walmart In Battle For India's Flipkart

Industry analysts familiar with India's retail marketplace said the deal would provide Flipkart with an infusion of capital while positioning Walmart for e-commerce growth in the world's second-largest country by population.

The traders' body demanded that the government form a regulatory authority for e-commerce and till the authority is formed, no such deal should be allowed.

While discount-hungry consumers might be rejoicing at news of the Walmart-Flipkart deal, wherein the United States retail giant plans to purchase a majority stake in Flipkart for $15 billion, it also has a major detractor for the very same reason.

CAIT said that it was really unfortunate that inspite of having a clear FDI policy, the foreign companies are finding escaping route whether it is in retail or e-commerce.

The traders' body has also alleged that after failing to enter India in retail sector through FDI, Walmart has chosen the e-commerce route. The deal to acquire Flipkart by investors led by Walmart was reportedly agreed upon last week, with Amazon being edged out by one of its biggest competitors in the US.

As in China, the Indian market is coveted by online retail players. At the time, tax department did not raise a tax demand as the deal was done offshore.

A major round of investment a year ago valued Flipkart at about $11.6bn; Walmart's offer, if press reports are accurate, values the firm at about $20bn.

Bloomberg reported Friday that Flipkart's board has approved the sale of a roughly 75-percent stake to the Walmart group, which also includes Google parent Alphabet. Softbank, one of Flipkart's investors, have been caught wrong footed not expecting a deal to close quickly. Sellers are Japan's Softbank and US-based Global Tiger, which are registered in the U.S. and Mauritius, respectively.

According to data from Grant Thornton, 21 deals worth Dollars 2,112 million were seen in 2017 with participation from players like Paytm and Flipkart. "Now that the rules are clearly written out, in any such transaction the 50% threshold is looked at and depending on the outcome and other factors such as treaty benefits, etc, the taxes are being paid and applicable reporting is also being made", Abhishek Goenka, partner and leader, corporate and worldwide tax at PwC, told the Indian Express.