The commerce and industry ministry today said it would come out with a definition of ‘group company’ soon, a clarification that would help global companies like Walmart to begin operations without violating norms.
“We are working on a clarification. I think it will be out in two months,” Department of Industrial Policy and Promotion (DIPP) Director Deepak Narain told reporters on the sidelines of an Assocham function. Global retail players are seeking clarity on this issue to chalk out their India plans.
According to DIPP rules, wholesale trade of goods would be permitted among companies of the same group. But, such trade should not exceed 25 per cent of the total turnover of the wholesale venture and only for internal use.
In April, Bharti-Walmart had sought clarifications on caps imposed on sales by cash-and-carry players to their group’s front-end companies and what exactly are group companies.
Bharti-Walmart is a 50:50 JV set up in 2007 between Bharti Enterprises and Walmart and is engaged in wholesale trade. It supplies to Bharti’s front-end retailing arm, Bharti Retail, which runs the Easy Day stores.
Narain also said DIPP would release the remaining five discussion papers on FDI policies by September.
