In May, the retail giant announced it was acquiring about 77 percent of Flipkart for around $16 billion in the biggest deal for India’s eCommerce sector.
“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading the transformation of eCommerce in the market,” Walmart CEO Doug McMillon said in a statement at the time.
On Wednesday (August 8), the Competition Commission of India (CCI) announced on Twitter that it had approved the proposed acquisition.
The deal will help Flipkart fend off Amazon’s entrance into the world’s second largest country by population, representing an eCommerce opportunity that Morgan Stanley estimates will be worth $200 billion by 2026. Euromonitor reports that online sales in India are currently growing about 35 percent a year, fueled by a rising middle class, demonetization and an increasing push toward urbanization.
But not everyone was in favor of the acquisition. Shopkeepers and traders affiliated with the Confederation of All India Traders held protests around the country last month. The group contends that the deal will create a monopoly in the retail industry and drive small mom-and-pop stores under.
CAIT said it was disappointed by the CCI’s approval.
“We will certainly move the court against the CCI’s decision,” Praveen Khandelwal, CAIT’s secretary general, told Reuters. “CAIT has called an emergency meeting of its governing council on August 19 at Nagpur, where we will finalize our strategy for a nationwide movement.”
For its part, Walmart said that it has been supporting local manufacturers by sourcing from small and medium-sized suppliers. Walmart already runs 21 cash-and-carry stores in the country, noted the report. “Our partnership with Flipkart will provide thousands of local suppliers and manufacturers access to consumers through the marketplace model,” Rajneesh Kumar, senior vice president, Walmart India, said in a statement.