New Delhi: Unmindful of the storm over foreign retailers entering India, Bharti Enterprises said on 23 February that its proposed joint venture (JV) with Wal-Mart is on track and well within the country’s regulatory framework.
“The JV on retail has been finalised and legal agreements are being worked out. We expect to sign an agreement in the coming weeks,” Bharti Enterprises Chairman Sunil Bharti Mittal said.
The move towards the JV comes on the heels of UPA Chairperson Sonia Gandhi writing to the Prime Minister advising caution in allowing Wal-Mart entry into India.
Foreign direct investment (FDI) in multi-brand retail is prohibited in India but 100% overseas investment is allowed in cash-and-carry (wholesale) business, precisely where Wal-Mart would be investing.
Mittal said Bharti’s JV agreement with Wal-Mart would be for cash-and-carry and back-end linkages and asserted that it was within policy guidelines. “Wal-Mart is going to apply for a JV, only in the area where policy exists,” he said.
Bharti, which earlier this week announced an investment of $2.5 billion (Rs11,059 crore) in the front-end of retail operations, said the JV would also look at supporting the ‘kirana’ (neighbourhood grocery) chain too.
He said: “Bharti Retail will not get a preferential treatment from the JV, as it will supply to the kirana stores,” which many fear would be wiped out if foreign retailers are let in.