Analysis Of The Walmart-flipkart Deal


In May 2018, Walmart Inc. announced that it would acquire a 77% stake in Flipkart, a leading e-commerce marketplace in India, for $16 billion. This was Walmart’s biggest-ever acquisition and one of the largest-ever acquisitions in the global e-commerce sector. Under the deal, Walmart would acquire about 77% of the shares of Flipkart Group at an estimated price of $16 billion, valuing Flipkart at $20.8 billion. The remaining shareholding would be retained by co-founder Binny Bansal and other shareholders including Tencent Holdings, Microsoft, and Tiger Global. The deal was structured as a combination of primary and secondary investment. Walmart would invest $2 billion in equity financing to help Flipkart grow its business and ramp up its operations in India. The deal would also see Walmart providing technical and management support to Flipkart and helping it to leverage its global scale and expertise in supply chain management, logistics, and retail. The acquisition was subject to regulatory approvals and was scrutinized by the Competition Commission of India (CCI) to determine whether it violated anti-trust laws. The CCI approved the deal in August 2018 after conducting a detailed investigation, stating that it was not likely to have any adverse impact on competition in the Indian market[i]. The deal was completed in August 2018, with Walmart acquiring a 77% stake in Flipkart Group. This deal was seen as a significant development in the Indian e-commerce sector and attracted a lot of attention both in India and globally[ii].


The Walmart-Flipkart deal was controversial and involved several legal and regulatory issues. These issues include:

  1. Competition concerns: The deal raised concerns about its potential impact on competition in the Indian e-commerce market. There were fears that the transaction could lead to a concentration of market power in the hands of a few large players, including Amazon, Walmart, and Flipkart. The Competition Commission of India (CCI) conducted a detailed investigation of the deal and ultimately approved it, stating that it was unlikely to have an adverse impact on competition.
  1. Policy issues: The acquisition of a majority stake in Flipkart by a foreign company like Walmart raised concerns about foreign direct investment (FDI) in the Indian retail sector. Several political parties and trade organizations opposed the deal, arguing that it could lead to the loss of jobs and harm small traders and retailers.
  1. Taxation issues: The transaction entailed the transfer of shares of Flipkart held by several investors, including SoftBank, to Walmart. The transfer of shares attracted scrutiny from the Indian tax authorities, who sought to tax the gains arising from the transfer.
  1. Shareholder disputes: Following the announcement of the deal, there were disagreements among the shareholders of Flipkart over the valuation of the company, which led to the exit of some of them.


The Walmart-Flipkart deal was subject to various legal and regulatory frameworks in India. The following are the relevant laws and regulations that governed this transaction:

  1. Companies Act, 2013: The Companies Act, 2013[iii] is the primary law that governs the incorporation, management, and operation of companies in India. The Walmart-Flipkart deal was structured as an acquisition of shares, and hence, it had to comply with the provisions of the Companies Act, 2013.
  1. Competition Act, 2002: The Competition Act, 2002[iv] is the law that governs the competition regime in India. The Competition Commission of India (CCI) scrutinized the Walmart-Flipkart deal to determine whether it violated anti-trust laws and led to a concentration of market power.
  1. Foreign Exchange Management Act (FEMA), 1999: The Foreign Exchange Management Act (FEMA), 1999[v] is the law that governs foreign exchange transactions in India. The Walmart-Flipkart deal involved the transfer of shares of Flipkart, held by foreign investors, to Walmart, and hence, it had to comply with FEMA regulations.
  1. Income Tax Act, 1961: The Income Tax Act, 1961[vi] is the law that governs the taxation of income in India. The Walmart-Flipkart deal was subject to taxation, and hence, it had to comply with the provisions of the Income Tax Act, 1961.

The Walmart-Flipkart deal was subject to the rule of law in India, and the parties involved had to comply with the various laws and regulations governing this transaction. The parties had to ensure that the deal was structured in compliance with the relevant legal and regulatory frameworks and that all necessary approvals and clearances were obtained. The deal had to undergo a rigorous scrutiny process by the CCI and other regulatory bodies to ensure that it did not violate any competition or other laws.


The Walmart-Flipkart deal attracted mixed reactions from various sections. Some welcomed the deal, considering it to be a win-win situation for both Walmart and Flipkart. On the other hand, some criticized the deal, alleging that it would hurt small traders and brick-and-mortar stores. The deal was also subjected to scrutiny by the Competition Commission of India (CCI) to determine whether it violated anti-trust laws. The CCI approved the deal in August 2018 after conducting a thorough investigation. The CCI stated that the deal was not likely to have any adverse impact on competition in the Indian market. However, the acquisition did face opposition from Indian trade bodies, such as the Confederation of All India Traders (CAIT). These organizations argued that the deal would harm small traders and brick-and-mortar stores by creating an uneven playing field in the Indian market. The Walmart-Flipkart deal has had significant implications for the Indian e-commerce market. The deal spurred increased competition in the sector and led to the rise of domestic players such as Reliance JioMart. The deal also paved the way for other foreign players to enter the Indian market, such as Amazon, which has continued to invest heavily in its Indian operations.

  • IP Rights: As part of the deal, Walmart acquired Flipkart’s intellectual property, including its trademark and brand. This also included Flipkart’s subsidiaries such as PhonePe, which is one of India’s leading digital payment platforms.
  • Employment and Labour: The deal also had implications on employment and labour. The acquisition enabled Walmart to create jobs in India, with plans to hire more than 1,000 engineers for Flipkart in the coming years. However, it also led to concerns regarding job losses and pay cuts for Flipkart employees due to Walmart’s history of cost-cutting measures in its global operations.
  • Compliance and Ethics: The deal raised compliance and ethical concerns regarding Walmart’s global history of non-compliance with anti-bribery and anti-corruption laws. The acquisition prompted the formation of a compliance and ethics committee to develop and implement effective compliance and ethics policies.
  • Impact on Indian Retail Industry: The deal had polarized opinions in India, with some arguing that it would create more jobs and boost the economy, while others believed that it would negatively impact small retailers and local businesses. Walmart’s entry into the Indian market would mean increased competition for local retailers, potentially leading to a reduction in market share and profits.
  • Impact on Indian Startups: The acquisition of Flipkart by Walmart had significant implications for the Indian startup ecosystem. It put a spotlight on the fact that Indian startups were scaling up to become potential acquisition targets for global conglomerates. This event fueled the thriving Indian startup ecosystem and boosted venture capital investment in the country.
  • Investment in Indian agriculture: One of the lesser-known aspects of the Walmart-Flipkart deal is the investment made by Walmart in Indian agriculture. The partnership aims to help Indian farmers get better at farming techniques, hygiene practices, and ensure better quality products. Walmart has set up 28 farm development centers across nine states in India, where it trains farmers in better farming practices and processing methods.
  • Supply Chain and Logistics: One of the most significant advantages Walmart had with the acquisition was the use of its proprietary supply chain and logistics methods. The acquisition gave Walmart access to Flipkart’s logistics network, which is one of the largest in India. Walmart has been able to improve the quality of Flipkart’s supply chain and logistics, which has significantly improved delivery timelines and customer satisfaction.
  • Impact on Indian Economy: The Walmart-Flipkart deal had a considerable impact on the Indian economy. The acquisition led to an increase in foreign investment in the country and boosted job creation. It also accelerated the growth of India’s e-commerce market, which has become a significant contributor to the country’s GDP.
  • Regulatory Hurdles: The Walmart-Flipkart deal faced regulatory hurdles in India. Under Indian regulations, foreign direct investment (FDI) in multi-brand retail is not permitted. Walmart, as a foreign entity, had to structure its acquisition of Flipkart in a way that complies with Indian norms. Walmart used a complicated offshore holding company ownership structure to bypass FDI restrictions.
  • GST Implications: The deal also had significant implications for the Goods and Services Tax (GST) in India. With Walmart being a global retail giant, the acquisition enabled Flipkart to tap into the expertise of Walmart’s supply chain and logistics capabilities, leading to more efficient operations and cost efficiencies. This could lead to lower prices for consumers and could also increase the tax revenue earned by the government.
  • Impact on Indian E-commerce Market: The Walmart-Flipkart deal gave Walmart a foothold in India’s rapidly growing e-commerce market, while also enabling Flipkart to expand its reach into new areas and leverage Walmart’s resources. The deal increased competition in India’s e-commerce market, leading to the growth of online marketplaces and offering more choices to consumers.


In conclusion, the Walmart-Flipkart deal was a significant event in the Indian e-commerce sector, with far-reaching implications for the industry. The deal was controversial and generated a lot of public debate and scrutiny from regulatory authorities. However, it was eventually approved by the Competition Commission of India (CCI) and completed in August 2018. The acquisition allowed Walmart to establish a significant foothold in the Indian market, leveraging Flipkart’s extensive customer base, technology, and supply chain management expertise. Moreover, it allowed Flipkart to compete more effectively against other e-commerce players, both domestic and foreign, while benefiting from Walmart’s global scale and expertise. The Walmart-Flipkart deal has led to increased competition in the Indian e-commerce market, allowing domestic players like Reliance JioMart to enter the market. Additionally, it has also paved the way for other international players, such as Amazon, to increase their investments in the country. However, concerns were raised about the deal, particularly its impact on small traders and brick-and-mortar stores. The deal also raised concerns about the potential concentration of market power in the hands of a few large players. Overall, the Walmart-Flipkart deal was a complex and significant transaction that involved several legal and regulatory issues. While it has had a positive impact on the e-commerce sector in India, there are still concerns about the impact it may have on small traders and brick-and-mortar stores. As such, it will continue to be subject to scrutiny and regulation as the Indian e-commerce market evolves and grows.

[i] Competition Commission of India (hereinafter, CCI), Order on Combination Registration No. C-2018/05/571 (2018).

[ii] Walmart, Walmart to Invest in Flipkart Group India’s Innovative E-commerce Company (2018),

[iii]  The Companies Act, 2013

[iv] The Competition Act, 2002

[v] The Foreign Exchange Management Act (FEMA), 1999

[vi] The Income Tax Act, 1961

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