On Wednesday, in a mega-deal, global retail giant Walmart announced that it will buy 77% stake in the country's largest e-tailer Flipkart. At present, Walmart operates 21 stores in India.
The RSS-linked Swadeshi Jagran Manch (SJM) today said that the deal signed between Flipkart and Walmart is not in the interest of the nation and termed it as ‘illegal’ and ‘unethical’. Speaking to The FinancialExpress.com, Ashwani Mahajan, national co-convenor of the economic wing of RSS, said that the deal will hurt small traders and result in killing jobs.
He said that allowing Walmart to establish its business in India will lead to an increase in the sale of Chinese goods. “In such a scenario, what will happen to the initiative of Make in India?” Mahajan further said that their fight is against any form of multi-brand retail.
“They (Walmart) bring commodities from China. When Chinese goods are brought to India and sold here… where will Make in India go? If our money is spent on our goods, it will create jobs. But the Walmart-Flipkart deal will kill the domestic market,” he said. Asserting that businesses will be hit, Mahajan said that small traders and farmers will be the worst hit as a result of the deal.
Mahajan claims that the market is currently competitive, “but Walmart will exploit it”. He said that they will buy farm outputs farmers at cheap rates. He claimed that in the US, Walmart shares up to 45% of the profits earned in the food sector with farmers while Amul gives farmers up to 80%. “How can you expect that the deal will be beneficial,” he questioned.
The outfit now wants the government to intervene and cancel the deal. “The deal is subject to the regulatory approval. It should be annulled by the government.”
When asked why the SJM did not protest when Flipkart sold Chinese goods, he replied, “Flipkart had no money. We have been protesting against this as well… but it doesn’t mean that you should allow a big fish to come and destroy the domestic market.” He maintained that the deal was not in accordance with the law of the land.
Earlier in the day, scores of activists belonging to Swadeshi Jagran Manch were detained while protesting in the national capital against the deal. Over hundred activists were taken to Tughlak Road Police Station. They were demanding a ban on FDI in multi-brand retailing from ‘backdoor’. Placards reading “deal between Walmart and Flipkart is illegal”; “reject imported items, use homemade items, say Vande Mataram” were displayed during the protest.
The Swadeshi Jagran Manch had also written a letter Prime Minister Narendra Modi on Wednesday opposing the USD 16 billion deal signed between Walmart and Flipkart. In the letter, Mahajan reminded the PM that SJM, RSS and BJP have a consensus that FDI in multi-brand retailing will not only kill entrepreneur but also is anti-farmer.
Mahajan went on to claim that Walmart people are seeking an appointment with Commerce Minister Suresh Prabhu, but “so far no appointment has been given to them”. He said that the Ministry of Finance has already directed the Income Tax department to scrutinise the deal. “They (Walmart) have been given permission to enter the Indian market through ‘chor darwaaza’ (back door),” he said.
The Indian Express today reported that the I-T department has already sent a letter to the company apprising it about the Sections of the Income Tax that will be applicable to the transaction. A copy of the letter was also delivered at the India office of Walmart.
In 2015-16, the I-T department had sought Rs 110 crore tax from Flipkart considering that the expenses made by the company were capital in nature. However, the company had moved the Income Tax Appellate Tribunal against the tax demand. It had argued that it claimed tax deduction citing marketing and discount as revenue expenses. The tribunal last month upheld the Flipkart’s argument and set aside the I-T department’s tax demand order.
On Wednesday, in a mega-deal, global retail giant Walmart announced that it will buy 77% stake in the country’s largest e-tailer Flipkart. With this, Walmart, which had been trying to enter the Indian market to finally get a foothold in the country. At present, Walmart operates 21 stores in India.