Indian trader group objects to Walmart-Flipkart deal

The Confederation of All India Traders filed an objection to Walmart’s buyout of roughly 77 percent of Bengaluru-based Flipkart. (Reuters)
Updated 29 May 2018

Indian trader group objects to Walmart-Flipkart deal

MUMBAI: An Indian trader body has raised objections to Walmart’s $16 billion acquisition of e-commerce firm Flipkart, though lawyers and sources said the complaint to the country’s antitrust regulator is unlikely to threaten the deal.
The Confederation of All India Traders (CAIT) filed an objection to the US retail giant’s buyout of roughly 77 percent of Bengaluru-based Flipkart, the body said on Monday, adding that the deal would create unfair competition and result in predatory pricing.
However, multiple sources close to the deal said that CAIT’s filing with the Competition Commission of India (CCI) did not pose a challenge to the acquisition.
“It’s very unlikely the CCI will look into this complaint as both Flipkart and Walmart are not competing in India in relation to any products or services,” said a lawyer with knowledge of the deal.
A source with direct knowledge of the deal said the CAIT complaint was “not a matter of concern”.
Walmart’s bid is at aimed at competing with arch rival Inc in a major growth market and prompted protests from Indian trade and nationalist groups that say small traders will suffer.
Amazon’s presence in India means that a Walmart-Flipkart alliance would not be a threat to competition, a CCI official said. However, the deal could be politically sensitive because it might affect small and medium-sized traders, added the official, who declined to be named because he is not authorized to speak to the media.
M. M. Sharma, head of competition law and policy at law firm Vaish Associates, said: “Blocking (of the deal) is highly unlikely, but the CCI will keep checks and balances so that competition in the market is maintained.”

Japan to issue 2.2tn yen bonds to offset trade war’s hit on tax revenues

Updated 22 min 19 sec ago

Japan to issue 2.2tn yen bonds to offset trade war’s hit on tax revenues

  • Cabinet OKs budget with 4.5 trillion yen in additional outlay

TOKYO: Japan’s government will issue an additional 2.2 trillion yen ($20.25 billion) of deficit-financing bonds to make up for a tax revenue shortfall, Finance Minister Taro Aso said, after the cabinet approved on Friday an extra budget for the fiscal year ending March 2020.

The extra budget will be compiled along with an annual budget for the year starting in April 2020 and sent to parliament for approval early next year.

It is the first time that the government has resorted to issuing extra deficit financing bonds since 2016, and shows how Prime Minister Shinzo Abe is struggling to balance the budget, a target he has already pushed back by five years to March 2026.

The government’s difficulties raising revenue and trimming debt issuance will further cloud the outlook for the “Abenomics” stimulus policy mix of bold monetary easing, flexible spending and structural reform.

Finance ministry officials said the government will slash the tax income estimate for the current fiscal year by 2.3 trillion yen from its initial target of 62.5 trillion yen as a slump in exports amid the Sino-US trade war has hit revenues.

Aside from the 2.2 trillion yen of additional deficit-covering bonds, the government will also issue additional construction bonds worth about 2.2 trillion yen to finance infrastructure spending.

The extra budget features additional fiscal spending worth about 4.5 trillion yen, the bulk of which will be spent, along with next fiscal year’s annual budget, to fund the stimulus spending of 13.2 trillion yen the cabinet adopted last week, the officials said.

The spending package was aimed at funding disaster recovery, countering downside economic risks and sustaining a fragile economy beyond the 2020 Tokyo Olympics.

In addition, the government will tap some additional 1.5 trillion yen from its fiscal investment and loan program, taking advantage of low borrowing costs under the Bank of Japan’s negative interest rate policy.

The amount of extra budget spending was much smaller than the 10 trillion yen that was first floated by ruling party lawmakers last month, highlighting limited fiscal space left for policymakers.