But there's more to this. It's actually Walmart who is pushing this deal aggressively as they see it as a chance to tap into the increasingly growing Indian market. In past few years, Walmart did try numerous times to set up their shop here but due to certain FDI regulations they simply couldn't get in. Moreover, it is learned that Walmart (once the deal goes through) will be increasingly looking to expand Flipkart's nascent grocery related business. They want to overhaul the farm-to-customer supply chain and hence current stage of Flipkart and their logistics wing could be a real boon for Walmart. Walmart does have few retail stores in India but they are in JV with a telecom company owner Sunil Bharti Mittal.
On the other side, Flipkart badly needs capital infusion as they are bleeding or burning money at a crazy rate. Whatever edge they had currently in India over Amazon is due to Myntra's apparel sales. Flipkart, technologically speaking is lagging behind Amazon. And this is a real pain which almost all online retailers are facing. The same thing happened with another e-comm company SnapDeal (Also backed by Softbank).
One thing is for sure, to capture the Indian market and dominate it, either of these companies had to adapt quickly to cater to tier 2 and 3 cities of India. Whoever rules these cities and improve on last mile delivery experiences in these cities will rule Indian e-comm.