Indian Government rejects the offer by Flipkart to enter Food Retail Business !!!
The proposal by Flipkart to enter the food retail business in a setback for Walmart has been rejected by the Indian Government. Walmart has recently counted it's business as Asia's 3rd largest economy worstly impacted by the corona virus pandemic, also owns the majority of the Indian e-commerce firm.
The nation's Ministry of Commerce and Industry's wing has told Flipkart, that competes with Amazon India that the proposed plan of Flipkart to enter Food retail Business in India does not complies the regulatory guidelines.
The officer at chief corporate affairs, Rajneesh Kumar has told that the company is currently engaged in the evaluation of the agency's response and is further seeking in order to re-apply. He additionally said, they believe that a marketplace driven by technology and innovation will undoubtedly add a significant value to the Indian farmer's and food processing sector's as it would bring the efficiency and Transparency.
The CEO at the Flipkart Group, Kalyan Krishnamurthy, while announcing the company's plan to enter the nation's food retail market last year said that the company has planned of investing a total amount of $259 million in their new venture.
Additionally, Krishnamurthy said that the company has planned to invest deeply in the local ecosystem and supply chain of the agriculture sector and work with numerous farmer's, their associations and the food processing industries. The food retail unit would contribute to multiplications in the income of the farmer's and supply quality and affordable foods to the people across the country.
Several other e-commerce and grocery firms that includes Grofers, Amazon and Zomato have been successful in securing approvals from Delhi, that permits 100% FDI in food retail currently for entering into the food retail business.
After the announcement of the most stringent lockdown across the nation, limited operations at Flipkart has negatively impacted the overall growth of the Company. Also, New Delhi has restricted Amazon and Flipkart from deliveries in many states and only allowed the sales of limited essential items like grocery and other hygenic products.
Though, India has eased some of the restrictions in the country for the purpose of resuscitating the country's economy, India maintains the stay at home orders for the 1.3 billion Indian citizens.