World’s largest retailer Wal-Mart says it is studying the feasibility of India’s FDI policy in multi-brand retail before finalising plans to enter the segment, as the norms played a part in its break-up with Bharti Enterprises.
“We continue to study the feasibility of the new FDI policy...we continue to monitor the environment for FDI in MBR (multi-brand retail),” Walmart India Spokesperson told PTI when asked about Wal-Mart’s plans for the multi-brand retail sector in India.
Stating that Wal-Mart plans to continue growing the cash and carry business, the spokesperson said, the company will work “with the government and interested stakeholders to create conditions that enable foreign direct investment in multi-brand retail”.
On the role played by the current policy in the company’s break-up with Bharti, she said: “Under the requirements contained in the new FDI policy, Wal-Mart could not invest in multi-brand retail through the existing Bharti Retail business.”
Bharti and Wal-Mart’s mutual decision to independently own and operate separate business formats in India is based on external and internal factors, including the new FDI policy, she added.
Last week, Wal-Mart and Bharti Enterprises announced that they were parting ways to operate independently in India, ending their six-year-old partnership.
The US retail agreed to buy out its Indian partner in their 50:50 cash-and-carry joint venture Bharti Walmart, which runs 20 wholesale stores under the Best Price Modern Wholesale brand in India, for an undisclosed sum.
Bharti, on the other hand, will acquire $ 100 million of Compulsory Convertible Debentures (CCDs) held by Wal-Mart in Cedar Support Services, a company owned and controlled by the Indian firm. It will continue to run its ‘easyday’ retail stores on its own.
Stressing that Wal-Mart is committed to India and the market, the company spokesperson said: “We are pleased with our established and successful cash and carry business and plan to grow that business...and remain steadfast in our belief of the important value Wal-Mart brings to India, including social and environmental benefits.”