Also one key thing is that Flipkart only saw eBay as a threat that could be bought by competition and eBay was a known brand and nearly every online person in India knew about it.

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