Yes. It's absurd really. If they were getting fraud orders from UP, they could have deviced a rating system. An older user with a good behavior could have continued to get the orders through their partners. Having a blanket ban makes them look bad. I mean just wait for their IPO, they are going to be slammed for ignoring a huge market like UP.
I personally would hate to be in a city where I cannot order certain items from
Flipkart. And know how governments are finally realizing that they are losing sales tax revenues through online shopping route, more states could join the list. Eventually, all stores would end up charging extra for sales tax like it happens on US stores.