New Delhi: Wal-Mart Stores Inc, the world’s largest retailer, sees progress in India opening up foreign direct investment (FDI) in multi-brand retail, its chief executive officer said on Monday.
“I see progress,” Mike Duke told reporters in India’s capital city.
“Feeling I get is very positive in the discussions we have had,” he said, adding that the company and its joint venture would address their India plans according to the possible changes in India’s foreign investment policy.
Wal-Mart, in an equal partnership with India’s top telecoms group Bharti Enterprise, operates four cash-and-carry outlets in India and also supplies to retail stores run by Bharti.
India’s $450-billion retail sector, with organised retail accounting for just 6%, is largely closed to foreign firms and favours small stores, which provide livelihoods for hundreds of thousands and serve a market of more than 1 billion.
Duke said he was optimistic about Wal-Mart’s business in teHE United States for the upcoming Christmas season, adding that the company has taken steps to have a more positive shopping season compared with 2009.
Most top retailers such as Wal-Mart and Carrefour have been waiting for India to ease foreign ownership restrictions to begin retail operation.
India’s current rules limit foreign direct investment in single-brand retail outlets to 51%, while retailers that carry multiple brands are restricted to cash-and-carry or wholesale outlets.
Germany’s Metro AG operates cash-and-carry outlets in India, while French retailer Carrefour is planning to set up wholesale stores.
This summer, India took a tentative step towards opening up Asia’s third-largest economy’s organised retail sector to foreign firms by putting out a discussion paper, but it steered clear of suggesting changes to an existing investment cap.
The entry of multinational retailers like Wal-Mart into India has been mired in controversy, with moves to open up the sector opposed by leftist parties and small traders fearful of job losses.
Analysts say opening up retail to foreign direct investment may help create thousands of jobs and rein in food price inflation by curbing waste in a country where at least 40% of produce is wasted because of inadequate storage and transportation.