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Walmart bets on India despite change in FDI norms
US retail giant Walmart and its Indian e-tail major Flipkart are betting big on India despite the revised norms for Foreign Direct Investment (FDI) in e-commerce.
By
migrator
migrator
Bengaluru
“Walmart’s and Flipkart’s commitment to India is deep and long term. Despite the recent changes in regulations, we remain optimistic about the country,” the regional Chief Executive Officer of Walmart Asia and Canada Dirk Van den Berghe said in a statement in New Delhi. The companies will continue to focus on creating “sustained economic growth and bringing sustainable benefits to India, including employment generation, supporting small businesses and farmers, and growing Indian exports to Walmart’s global markets”, added Berghe, who is also the retail giant’s Executive Vice President.
Walmart’s assertion on the company’s commitment to India came after American investment bank Morgan Stanley in a report said the former might exit the country after the new FDI norms in e-commerce came into force on February 1. “An exit is likely, not completely out of the question, with the Indian e-commerce market becoming more complicated,” the NYC-based financial services firm said in its report titled “Assessing Flipkart Risk to Walmart EPS (earnings per share).” In May last year, Walmart bought 77 per cent equity stake in Flipkart for a whopping $16 bn (Rs 1,16,256 crore).
The revised FDI norms in e-commerce have tightened the noose around the businesses of leading e-tailers - Walmart-owned Flipkart and Indian arm of US e-comm giant Amazon. The policy revisions, issued by the Ministry of Commerce and Industry on Dec 26, 2018, barred e-commerce platforms providing a marketplace from exercising control or ownership over the inventory and forbids any company to sell its products exclusively on an e-commerce platforms alone.
NRN Murthy-backed Catamaran’s Cloudtail returns to Amazon India
Global software major Infosys co-founder NR Narayana Murthy’s Catamaran-owned Cloudtail, a leading seller on the Indian arm of e-tailer giant Amazon, returned to the platform on Thursday after a week. Several of Cloudtail India Pvt Ltd’s products, which were not accessible on Amazon India since February 1, the day when the revised norms for Foreign Direct Investment (FDI) in e-commerce were implemented by the Ministry of Commerce and Industry, were back on the platform from Thursday. The revised norms barred e-commerce platforms providing a marketplace from exercising control or ownership over the inventory and prevent any company to sell its products exclusively on an e-commerce platform. “On February 6, Catamaran has effected the required changes to be 100 per cent compliant (with the revised FDI in e-commerce norms). We regret the inconvenience caused to our suppliers and customers due to stoppage of operations of Cloudtail between February 1 to 6,” its Chief Executive Abhishek Laxminarayan said in a statement here.
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