Back in time eBay was operating in Indian market and eBay was successful as the payment service used on eBay was PayPal, buyers had protection in India which they couldn't get with any other local website as online payment infrastructure was in dark ages in India at that time.
After that India rapidly grew in e-commerce and payment platforms rapidly developed (now they are at par with western ones or we can say even better and payment regulations also improved a lot). Now logistics has also improved a lot, so we can receive goods in just 1 or 2 days in any part of the country. We've new expressways, freight corridors, capacity expanding rapidly so now even more businesses is possible in India yet we are leaving the obvious one out. Where are all my Indian executives, investors, guys from IITs are doing? Why they aren't working on this?
Then Flipkart buys eBay India and shuts it down.
And now there exists market vaccum. Everyone is looking at each other, no startup founder doing anything about it. Existence of eBay alternative will add great efficiency to India market, reduce its CO2 footprint as well when used products find buyer instead of destroying and remelting them.
Just to remove this possibility of being used as a weapon in competition's hand, they killed it.
They certainly didn't understand the whole use case of eBay like website but killed it because it was possible to use it for competition in consumer goods space considering it had many things that were being sold on Flipkart too
Flipkart has a history of buying and shutting down businesses.