Merchants in New Delhi's bazaar have mobilized against Amazon and Walmart's e-commerce platform Flipkart, demanding the companies "go back" to their countries, according to Bloomberg.

This sit-in, in Sadar Bazaar's central traffic circle, was one of about 700 protests against the grocery giants. It arose amidst official investigations by the Indian government into allegations of predatory pricing by Amazon and Walmart.

The investigation addresses the concerns of 70 million merchants represented by India's shopkeepers' union. Said union is particularly powerful.

It alleges that the companies are "circumventing the rules with predatory pricing and deep discounting". Effectively, the union calls for the complete shut-down of the companies' online marketplaces.

Shopkeepers specifically cited the retailers' Diwali holiday sales as being in violation of commerce rules.

In response, Amazon and Walmart said in statements to Bloomberg that their operations comply with Indian laws.

Tension between shopkeepers and foreign retailers

Earlier this year, the union won a case against foreign e-commerce players. This move forced Amazon and Flipkart to remove thousands of items from their virtual shelves and reorganize their operations.

The union's activism has also caused the government to place "onerous restrictions on foreign retailers" which include a minimum US$100mil investment.

These changes caused chaos for foreign grocers like Walmart and Amazon. It also made analysts question their investments in India.

Walmart's Flipkart deal in the country was the retailer's biggest yet, costing US$16bn.

Amazon also pledged to spend US$5.5bn to win India.

"The motive of Amazon and Flipkart is not to do business, but to monopolize and control," secretary of India's Confederation of Traders Praveen Khandelwal told Bloomberg.

To address the conflict, India must take into consideration small shopkeeper's demands, say experts.

“For a government...which has the support of small businessmen, it may not be prudent or politically advisable to totally ignore such demands," Sandeep Shastri, a political scientist at Jain University told Bloomberg.

India is currently looking to set up a dedicated commerce regulator.

To read the full article, click here.