India’s Role In World Economy And Walmart

This essay explores India's role in the global economy and Walmart's acquisition of Flipkart, the largest online retail market in India. It discusses the growth of retail markets in India, the reasons behind Walmart's interest in India, and the importance of abiding by social norms in the Indian market. The essay also highlights the challenges and regulations faced by foreign companies in the Indian marketplace.

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India’s Role In World Economy And Walmart
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1INDIA’S ROLE IN WORLD ECONOMY AND WALMART
This essay will deal with the topic of Walmart and how it has bought Flipkart, the
largest online retail market in India. Retail markets are forming an important part of the world
of marketing strategies in the modern times. These markets help to make sure that the
products and services from the different countries are exchanged between different nations of
the world to ensure that people of different countries gets to know about the products from
different parts of the world. In the recent times, with the emergence of e-commerce sites, it is
becoming much easier for foreign markets to enter the Indian territories and sell their goods
and products in the Indian marketplace. Through the Indian retail marketing sites, the
customers can easily purchase their products from one parts of the world for both themselves
as well as their family members. According to Browne (2016), this is now turning to be a
competition between the Indian and foreign markets. Recently, it has been reported that
American e-commerce company Walmart has brought acquisitions into Indian e-commerce
company Flipkart. As a result, Flipkart, will now be entirely controlled by Walmart which
will play an important role in the economy of India and it is expected to be highly profitable
for the Indian markets. India is also expected to become a global retail market in the world in
the near future.
The thesis statement of this essay is to ensure that why India is one of the leading global
market retailers in the world. It will also explain why Walmart is so much interested in
India and why it has taken over India’s leading e-commerce company Flipkart. Finally,
the thesis will also explain why Walmart also needs to abide by various social norms in the
Indian markets to make sure that they can become a market leader in the Indian market.
Retail markets are used to refer to those markets of the world whose retail products
are well known for buying among the target audience. As stated by Galvin (2015), these
markets are the ones where people buy their various needs and wants from. It has been found
in a survey that India, along with China are one of the most attractive countries for entering

2INDIA’S ROLE IN WORLD ECONOMY AND WALMART
the retail market in the world. India itself has become one of the most attractive retail
markets of the world since 2016, and is fast emerging as the next e-commerce boom market
of the world. It is expected to increase by 60% by 2020 due to factors like changes in lifestyle
and increase in income. India has allowed foreign investors to enter its markets and is still
improving on this field. As stated by Sims (2017), in spite of having a complex market
system, the country is making improvements in its infrastructure with the help of foreign
investments in the market. Recently, the Indian Government has allowed 100 per cent foreign
investments in its market which has allowed foreign companies like Walmart to compete with
local brands Café Coffee Day (CCD). Although India still needs to do a lot of work to make
it an e-commerce market, it is still making improvements in its market infrastructure for e.g.
Flipkart, being an Indian online retail company, sales their products both in the country and
abroad.
India has been playing a considerably important role in the global economy of the
world. As stated by Galvin (2015), there has been a lot of change in the world market since
the World War II which has resulted a great deal of change in the companies and their
marketing strategies by making new rules and regulations in the country. Although India’s
market economy is still comparatively weak, it has however, improved a great deal in the last
few years. India currently stands in the fourth place in the current world economy in terms of
Gross National Income at purchasing power exchange rates (Browne, 2016). It was estimated
that till 2005, India had a GDP in terms of PPP which was 5.9% thereby making it the fourth
highest country in the world in terms of global economic contribution (Bloomberg, 2019). It
has been found that in the last ten years, India’s growth rate on an average had been more
than 8% averaging it in 6.4%. The financial integration of the country has also increased this
time from 15.33% to 19.88%. Moreover, at this time, the industry sector has also risen to a
share of 26.1% around 2005-2006. Although the GDP of the country is high enough, it has

3INDIA’S ROLE IN WORLD ECONOMY AND WALMART
resulted in low inflation in the country. It is expected that the government will be taking
various measures to make sure that the inflation of the company remains low while India
continues to contribute more and more to the global economy of the world. If the country can
maintain the low inflation rate with high economy and more foreign investment, then in no
time, the country will become in first or second place in terms of being one of the largest
retail markets of the world beating China and Japan in the process. This will add to the
competitive advantage for India as it will give them greatest profit in the market place and
will place it in a leading position.
According to Browne (2017), Walmart decided to make its move in the Indian market
by moving into a direct competition with Indian based e -commerce company Flipkart. It had
acquired a 77% stake of shares in Flipkart after making its debut in India some eleven years
ago. Since then the company has been working in India cooperating with various other e-
commerce sites. As stated by Grant (2016), in the recent times, Walmart looks to continue
with Amazon which is another e-commerce giant in the Indian market, which is both good as
well as bad. It is said that if they do compete with each other, then it will be very good for the
customers as Walmart will make sure that they turn out to be the leaders of the marketplace
by attracting more customers with their product and services. This is bound to attract more
customers as they will be more interested in Walmart’s products or services although they
would be expensive.
On the other hand, if Walmart turns out to be a company that manufactures goods and
products for the Indian market, that might turn out to be very difficult for them as they need
to make sure that the Indian public are interested in their products and services. However, if
the Indian customers turn out not to be interested in Walmart’s products and services, then it
can turn out to be difficult for them as other e-commerce companies might beat them in their
market competition (Chun, 2016). Also, the newly made rules and regulations might restrict

4INDIA’S ROLE IN WORLD ECONOMY AND WALMART
them from selling their products to countries where they are prohibited. This will prove to be
an unfair competition for them as other companies will take their spot and earn profits in their
place.
Social Relations always plays an important role in the success story of any foreign e-
commerce company when they enter the marketplace. As stated by Sims (2017), various
groups are trying various means to blend with the societal rules and regulations to make sure
that the Indian customers are interested in their products and services. This might play an
important role in determining whether the companies would stay in the marketplaces or they
might have to withdraw from the marketplace. As stated by Galvin (2014), therefore, it is
necessary for Walmart to make sure that they have a good understanding of the social culture
and norms that are present in the Indian Society. India is a diverse country with many
different cultures and many different languages spoken by the people of the country. Thus,
Walmart needs to cater to all these cultures to have an advantageous market position in the
Indian subcontinent. This includes creating products that will cater to the needs of these
people of different cultures, religions and languages. Walmart needs to scout the market to
make sure that the Indian customers are really interested in the products and services that are
sold by Walmart. Walmart also needs to make sure that they keep the pricing systems such it
will nether be expensive nor cheap but can easily be affordable. This will enable the
customers to buy the products and services that are being sold by the particular company in
the market. Abiding societal norms, rules and regulations will allow Walmart to understand
the needs and demands of the particular target audience that would help them to make
products according to their particular needs and demands. Walmart needs to be aware of all
these social issues in order to be a successful retailer in the Indian marketplace (The
Economic Times, 2019).

5INDIA’S ROLE IN WORLD ECONOMY AND WALMART
However, though Walmart has brought acquisition over the Indian e-commerce site
Flipkart, there are a lot of problems that have caused about their acquisition in the
marketplace. As stated by Sims (2017), one such concern is about Walmart not abiding by the
Indian FDI laws as pointed out by Confederation of All India Traders (CAIT). They have
pointed out the fact that due to Walmart not abiding by the FDI laws of the country, it has led
to interference with the methods of pricing and monitoring of the products and the services in
the country. Thus, the opposition side is of the opinion that that Walmart should always make
it a method of abiding by the rules and regulations set by CAIT should always be maintained
as this would help to keep the balance between the Indian e-commerce companies as well as
the foreign e-commerce companies This step would help to ensure that there is consistency in
the society and both Indian and foreign companies can follow the rules equally to avoid any
unnecessary problems in the society (Grant, 2016).
The main regulations of the FDI in India include the principles that development and
production of plants and seed materials needs to be done carefully, various services should be
applied in the field of animal husbandry and horticulture, and proper growth of fruits, seeds,
vegetables and other types of plants and seeds. Apart from this, other regulations of the FDI
includes the plantation sectors of tea and coffee plantations, mining coal and petroleum in the
mining sectors of the country. As stated by Browne (2015), some other regulations of the FDI
IN India includes the issues of broadcasting which consists of the problems of DTH and
Cable Television Networks System. Other facilities include the concepts of print media and
electronic media which forms an important part of the FDI investment of a particular country.
Apart from these factors, there are other factors that includes the fields of civic aviation
mainly dealing with aeroplanes and other aircrafts which play an important role in the FDI of
a particular country. Banking, public sectors and other centres also forms an important part

6INDIA’S ROLE IN WORLD ECONOMY AND WALMART
of the country’s FDI and the economy. All of these contributes to the formulation of the
regulations and rules of FDI policy in India (Chun, 2016).
However, just like FDI policy is accepted in certain sections of the country, there are
other areas where the FDI policy is also restricted as well. These restrictions include the areas
where the FDI is not allowed in our country. As stated by Galvin (2017), foreign companies
need to take special permission from the government to make sure that they can invest in the
areas which are restricted areas of FDI. These include the fields like gambling and betting
where the government completely restricts any forms of betting as these are harmful to the
nation and its people. Other areas of foreign direct investment restrictions include the areas of
manufacturing tobacco, cigars, cheroots and other types of tobacco substitutes. Problems of
real estate systems are also not allowed under the foreign direct investment in the country.
Trading in TRP’s and businesses of chit fund and other sectors of illegal companies are
restricted by the concept of FDI restrictions. Aside from these there are other areas that are
restricted by Foreign Direct Investment that includes the problems of activities sector that are
not open to the areas of private sector investment can also be restricted by the problems of
Foreign Direct Investment. Recently, e-commerce introduced in the FDI sectors of India has
also received several restrictions from the CAIT. One of the main reasons this took place is
the reason of control of inventory. This has led to the FDI imposing high restrictions on it as
it would allow the Indian companies to gain more experience in the Indian markets rather
than the foreign e-commerce companies entering the Indian society (Bloomberg 2017).
As stated by Browne (2015), despite so much globalization going on various countries
of the world, there are still criticisms from several public who disagree with the concept of
anti-globalisation campaigns of the world. They are of the opinion that it is due to the
globalization process that the foreign companies are earning more than the Indian companies
in the Indian markets. As stated by Sims (2016), because of this, the Indian companies are

7INDIA’S ROLE IN WORLD ECONOMY AND WALMART
suffering losses in their businesses compared to the foreign markets in the Indian
marketplace. This would be useful to the Indian companies in the marketplace as they can
earn more than any other foreign organizations in the country. As stated by Conway (2009),
these individuals state that if the economy of the country be equally balanced between the
Indian and the foreign markets in the Indian markets, then the society will prosper as there
will be equal opportunities everywhere in the marketplace and both Indian and the foreign
markets will be equally profitable of each other. As stated by Galvin (2016), the foreign
companies like Walmart must follow the rules and regulations set by FDI and other
regulatory bodies of the society to make sure that they are equal in attracting customers in the
marketplace in terms of attracting loyal customers and making profits equally in the
marketplace. It is also the duty of the FDI to make sure that the that all companies be it Indian
or American must maintain the rules and regulation of its rules and policies to ensure that
they can co-exist peacefully in the marketplace (news.Walmart.com). If they abide by
following these rules and regulations, then the companies will be able to both meet their
target audience as well as earn profits in the marketplace and be profitable. Walmart must
make sure that they follow the social norms and regulations necessary for them to establish a
strong market presence in the country (Business Insider 2019). They should establish their
products and services in respect of the society and culture so that the Indian audience feels
interested in buying their products. As stated by Mckenzie (2019), this would help the foreign
companies to gain more customers in the markets while at the same time, they can stay true to
the culture by producing goods which can be a part of their indigenous cultures. According to
Gilpin (2018), the more they establish their strong market presence in the country, the better
they can be a part of the Indian society and include the Indian markets.
Thus, from the above essay, it can be concluded that India is surely going to become
one of the leading retail marketers of the future. This can be ensured by the fact that the GDP

8INDIA’S ROLE IN WORLD ECONOMY AND WALMART
of the country is at an all-time high which, although has led to high inflation in the
marketplace, can still be put to control that can be beneficial to the Indian marketplace (The
Economic Times, 2019). The research also states that that FDI sectors of India should
establish certain rules and regulations that needs to be followed by both Indian and foreign
markets in the world. These rules and regulations would help to make sure that there is
equality in the markets of earning profits in the marketplace. While it is true that most people
support globalization campaigns, there are few others who oppose the system of globalization
on the grounds that if foreign companies start their markets in India, then Indian companies
would not earn much which would lead to them suffering lose in the marketplace. Thus, in
order for both foreign and Indian companies to earn successful profits in the marketplace,
they musty need to co-exist together so that they can exchange culture between each other as
well as earn large profits in the marketplace. It is expected that that this will be beneficial to
both Indian and foreign markets.
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