Flipkart to re-apply for food retail license

Walmart Inc.’s Indian e-commerce unit Flipkart said on Monday it would re-apply for a food retail license in India after reports said its earlier proposal was rejected by the government last week.

India’s Department for Promotion of Industry and Internal Trade (DPIIT) last week rejected the e-tailer’s proposal to sell food products through online and mobile platforms, the Times of India newspaper reported on Monday.

“We are evaluating the department’s response and intend to re-apply as we look to continue making a significant impact on small businesses and communities in India,” the company said in a statement.

If successful, Flipkart would compete with Amazon.com Inc’s India unit, Alibaba-backed BigBasket, SoftBank-backed Grofers, and Reliance Industries Ltd’s recently launched JioMart.

The government permits 100% foreign direct investment in food retail for food produced and manufactured in India.

Last year, the company had set up a new local entity - Flipkart Farmermart - to focus on food retail in India, and had applied for requisite licences from the government. Flipkart Group CEO Kalyan Krishnamurthy, at that time had said that the move an important part of the company’s efforts to boost Indian agriculture as well as food processing industry in the country.

Interestingly, Amazon had received the government’s nod for its $500 million investment proposal for retailing of food products in India in 2017.

Grocery segment accounts for a significant portion of the unorganized retail segment in the country. Estimates suggest the market to be worth over $200 billion in India.

The grocery segment has witnessed significant growth amid the COVID-19 pandemic. Many people turned to e-commerce platforms like Grofers, BigBasket and Amazon India for their grocery purchases during the lockdown as they looked at maintaining social distance.

Market watchers feel that grocery segment would continue to scale in the coming months in view of the COVID-19 situation.

PTI contributed to this story.