US-based retail giant Walmart has stated that though it is ‘disappointed’ with e-commerce rules, it’s confidence in the Indian market remains intact and it will continue its operations, reports Press Trust of India (PTI).
On 6 February 2019, US-based investment banking firm Morgan Stanley warned that Walmart might offload its stake in Flipkart in response to new FDI norms in India’s e-commerce market that came into force on 1 February.
Walmart bought 77 per cent stake in Flipkart in May 2018 for $16 billion. Flipkart, along with Amazon India, dominates India’s e-commerce market.
“In India, we remain optimistic about the e-commerce opportunity, given the size of the market, the low penetration of e-commerce in the retail channel, and the pace at which it's growing,” said Walmart’s Chief Executive Officer C Douglas McMillon.
McMillon stated that the company was looking to collaborate with the government on e-commerce regulations to ensure “a level playing field” for all players.
“In the future, we hope to work with the government for pro-growth policies that can allow this nascent industry and the domestic manufacturers, farmers, and suppliers that benefit from it to develop and prosper,” he added.
The government had introduced new FDI rules in December 2018 which barred e-commerce portals from availing FDI if they hold inventory via subsidiary companies.
According to an Economic Times (ET) report, sales at both Amazon and Flipkart fell by a third since the new regulations came into force.
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