Walmart CEO writes to Indian PM on data policy and regulatory stability

Follow us on

Walmart CEO Doug McMillon has written to Prime Minister Narendra Modi on issues related to data privacy and regulatory stability for the e-commerce sector and has urged him to reduce the number of licences and permits for the opening of new stores.

McMillon in a letter has assured the prime minister of Walmart's commitment to increasing global sourcing from India, empower small and medium enterprises and more job creation. McMillon had met Modi during the prime minister's recent US visit. Global retail giant Walmart, which has invested USD 16 billion in Flipkart, is facing challenges after the foreign direct investment rules for e-commerce marketplaces were changed by the government through a revised policy on FDI in online retail.

"A stable, welcoming regulatory environment will allow us to continue to invest in creating more jobs and building infrastructure that benefits the Indian suppliers and customers," McMillon said in the letter. He also appreciated the prime minister for listening to the retailer's concerns on regulatory stability and uniform implementation of regulations in the e-commerce and retail sectors.

"We have been encouraged by the recent consultations with your government and we remain ready to collaborate to ensure proper protection while creating a pro-growth agenda," It said.

The new FDI policy, which has come into effect from February this year has barred online marketplaces like Flipkart and Amazon from selling products of companies where they hold stakes and banned exclusive marketing arrangements that could influence product price.

It also mandates them to offer equal services or facilities to all its vendors without discrimination. Moreover, both leading online sellers are also facing regulatory investigations here for alleged violation of the guidelines by predatory pricing and deep discounting.

Doug McMillon has also raised the issues related to data privacy saying regulating new technologies are issues which are faced by the governments around the world.

"We share the Indian government's concern about data privacy for Indian citizens and their ability to control the use of their personal data. Flipkart and PhonePe have invested in local data infrastructure to ensure Indian can benefit from the growth of the data economy in India," McMillon said.

Walmart, which has selected India as a hub for its global retail technology innovation, believe it is important to allow business appropriate means to transfer data across borders.

"We understand regulator have concerns and are happy to work with your government as specific policies are being considered to ensure details of the policy do not unnecessarily have a negative impact on the industry," it said. He has also pointed out the number of permits and timeframe required to open new stores for the retail industry and expressed to work with the government to find an effective way to streamline licensing and permitting procedure.

"High number of overlapping permits are challenge in the retail sector as well. On average, we currently need more than 45 permits and three years to open a new best price store. This is significantly longer than it takes in the US and many markets in which we operate," it said.

Within a few years, Walmart will be sourcing at least 25 per cent of our fruits and vegetables directly from farmers, benefitting farmers from UP, Andhra Pradesh and Telangana as it would provide greater price transparency and direct value for their product, he informed.

Walmart is also looking to increase sourcing from the Indian companies for its global supply chain as well as local operations here.

"We see significant opportunities to grow sourcing from Indian companies to sell in India and for export to our global supply chain," the letter said adding that Walmart sources 95 per cent locally, which it sells through its network of Best Price Stores in India.

Last year on August 18, Walmart had completed the acquisition of 77 per cent stake in Flipkart for about USD 16 billion (Rs 1.
05 lakh crore), a deal which gave the US retailer access to the Indian e-commerce market.

ALSO READ| Walmart reinforces commitment to support India's smallholder farmers

ALSO READ| India's leading e-tailer Flipkart, co-founder sells part stake to Walmart for 531 crore