Government rejected Flipkart’s entry to food retail business
- Government has rejected Walmart-owned e-commerce firm Flipkart’s proposal to enter the food retail business citing regulatory issues.
- The Department for Promotion of Industry and Internal Trade (DPIIT), a wing of the nation’s Ministry of Commerce and Industry, told Flipkart that their proposed plan does not comply with regulatory guidelines.
- Following the government’s order, Flipkart intended to re-apply for the license at the earliest.
- Last year, the company had set up a new local entity ‘Flipkart Farmermart’, with an authorised equity capital of Rs 1,845 crore, to focus on food retail in India and had applied for requisite licences from the government.
- India’s foreign direct investment (FDI) policy allows 100 per cent FDI in food retail for food produced and processed in India.
- Numerous e-commerce and grocery firms such as Amazon, BigBasket, Zomato and Grofers are already operating in the said segment in India.
- Grocery segment accounts for a significant portion of the unorganised retail sector in the country. Estimates suggest the market be worth over $200 billion in India.
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