New norms may force Walmart to ‘exit’ Flipkart

New Delhi, February 5

Retail giant Walmart, which paid $14 billion for Flipkart stock with a promise of an additional $2 billion in physical structure investment, may exit after India’s new Foreign Direct Investment (FDI) norms for e-commerce companies came into force, US investment banker Morgan Stanley has warned.

“An exit is likely, not completely out of the question, with the Indian e-commerce market becoming more complicated,” Morgan Stanley said in a report late on Monday.

The Walmart-Flipkart saga might turn out to be similar to what happened with Amazon in China in late 2017.

“There is a precedent for an exit as Amazon retreated from China in late 2017 after seeing that the model no longer worked for them,” read the report. — IANS