For the first time since the rollback of the retail foreign direct investment (FDI) decision, US-based retail major Walmart has spoken out, reiterating its faith in the India market.
The largest retail chain of the world had maintained complete silence since the government put on hold the Cabinet decision to allow 51 per cent FDI in multi-brand retail. Walmart in a joint venture with Bharti Enterprises, told Business Standard it remained “optimistic and upbeat about India”.
A month after the government kept in abeyance its 13-day-old Cabinet decision on retail FDI, Walmart said the chain has committed to its operations in India. “We, along with our partner Bharti Enterprises, are here for a long term and recognise the importance of the Indian market,” it said, to a question on the group’s perception of the Indian market following the government’s reversal of stand on retail FDI.
Walmart’s view on the India market assumes significance as the buzz on retail FDI has made a comeback. Top government officials have indicated the multi-brand FDI proposal is likely to be taken up once again after the assembly elections in five states get over.
Stating that India is one of the fastest growing markets in the world today, a Bharti Walmart spokesperson pointed at the opportunity in the country.
“Organised retail is relatively new in India and forms only five per cent of the total retail industry in the country,” the company said.
More From This Section
It added, “We have invested time and efforts to strengthen our back-end supply chain and put merchandising plans in place, to get optimum and quality assortment that will appeal to Indian customers.”
Walmart and Bharti Enterprises are in a 50-50 JV for operating a cash-and-carry (wholesale) business in India. Already running 14 cash and carry outlets, the two want to extend the partnership to the front-end multi-brand category once FDI is permitted there.
While 100 per cent FDI is allowed in cash and carry, up to 51 per cent is permitted in single brand. The Union Cabinet took a decision in November to permit up to 100 per cent FDI in single-brand retail, but the notification is yet to be out on that.
The Cabinet also decided to permit up to 51 per cent FDI in multi-brand retail, in November, but within days the UPA government kept the decision in abeyance after protests by various political parties, including its allies. The government is now in consultation with several stakeholders to revive the move, perhaps with a bit of tweaking of norms.
Earlier, Bharti Walmart chairman Rajan Bharti Mittal had indicated Bharti’s ‘Easy Day’ stores may be leveraged for Walmart’s entry into the front-end space.
“We already have 170 stores and are expanding as we go into front-end (with Walmart). That brand (Easy Day) is established. Brands are something you create, and don’t want to lose,” Mittal had said in November.