Flipkart-Walmart deal: We need a level playing field, say retailers

Walmart-Flipkart deal proves again that govt has not opened its eye fully, says Kumar Rajagopalan

While on the one side the government is allowing marketplace companies like Flipkart to access foreign capital, on the other hand, it is not allowing the Indian retailers to access foreign capital to grow better. This is pointing towards lack of a level playing field and it does not make any difference whether Tiger Global owns Flipkart or Walmart has it, alleges Retailers Association of India (RAI)

Kumar Rajagopalan, CEO, RAI said that the Flipkart-Walmart deal doesn’t make any big difference or impact on the country’s Retail industry as the ownership is getting changed only. The damage is being done for the last four to five years ever since marketplace companies like Flipkart were allowed to access foreign capital.

"While we have been telling that there is no level playing field, they are still not being taken care of. The real war is not about online and offline; our belief is that the real issue is about FDI in multi-brand retail is allowed or not," he said. 

"We have been telling the government to allow Indian Retail to access global capital, but that has not happened yet. We have been curtailing ourselves though there is more room for growth. We are allowing one or two people come in and indulge in FDI trading," added Rajagopalan. 

The RAI represents the retail industry in the country, with members such as Aditya Birla Retail Ltd, Arvind Lifestyle Brands Ltd, Madura Fashion and Lifestyle Ltd, Mahindra Retail Private Limited, Reliance Industries Ltd, Reliance Retail Ltd, Shoppers Stop Ltd, Titan Company Ltd, Timex Group India Ltd, eBay India Pvt Ltd, Ikea India Pvt.Ltd and Jasper Infotech Pvt.Ltd. (Snapdeal.com).

India is known as the best market to be in, currently in Retail, with the income levels and GDP growing and with a huge consumer base. While India has been looked at as the best market for almost all the companies out there for more than five years now, the FDI norms in the country did not allow for Indian retailers to access global capital and grow fast, and also the international multi-brand majors were not able to come in because of this.

However, the marketplace companies have been able to access foreign capital stating they are technology companies. RAI's stand has been that while the marketplaces have been telling that they are technology companies, they are also indulging themselves into pricing, selling to the end customer and offering discounts. 

"There is trading happening in this country, which can get huge value and valuation. But because of the vague norms, the valuations are not necessarily captured in India," he alleges.

The government should open up the industry for foreign capital, at least step by step. 

“It is good to see an Indian company is attracting global player like Walmart. But the question is, does the Indian retailer has level playing field?” he averred.

According to RAI, the Indian retail industry is estimated to grow at around 10 per cent on the backdrop of growing income level and GDP. Besides the GST has also accelerated the growth for the modern retailers and many global chains want to be part of this growth.