BackWal-Mart to engage with new, stable govt
Wal-Mart will seek to expand its business in India says Krish Iyer
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Delhi: The world’s largest supermarket chain, Wal-Mart Stores Inc, will work with India’s new government and seek to expand its business in Asia’s third largest economy, the head of its India busines said on Saturday.
“As India elects a new and stable government at the Centre, we’ll continue to remain engaged, committed and work together with the government and other stakeholders and continue adding value to the economic growth in the country," said Krish Iyer, head of the company’s India business.
His statement came a day after the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) swept to a victory in the 16th general election, ending the 10-year rule of the Congress-led United Progressive Alliance. The BJP is opposed to foreign direct investment (FDI) in so-called multi-brand retail.
In 2012, the Indian government allowed FDI in supermarket chains, but left it to the state governments to decide whether they will allow foreign-owned retail stores on their territory.
Wal-Mart, through its investments in cash and carry or wholesale stores and supply chain infrastructure, and sourcing for global markets, wants to continue to make “important social, environmental and economical contributions" to India, Iyer said.
“Through investments, Walmart has created a large number of direct jobs and many more indirect jobs, as over 95% of the products sold at our stores are sourced from domestic suppliers in India," Iyer said.
In its manifesto, the BJP said that if elected to power it would allow FDI across sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialized expertise, but not in supermarkets.
“The BJP is committed to protecting the interest of small and medium retailers...and those employed by them," it added, disappointing foreign retailers.
However, before the final phase of the Lok Sabha polls, in an interview to Times NOW, the English news channel of Times Television Network, Modi indicated that if elected, his government need not necessarily reverse the decision that allows FDI in multi-brand retail.
“The government is a continuous process. But it is very unfortunate when the Samajwadi Party creates a district and the Bahujan Samaj Party comes and destroys it, the AIADMK (All India Anna Dravida Munnetra Kazhagam) takes some decisions and then the DMK (Dravida Munnetra Kazhagam) comes and overrules it to make another. The country cannot run this way. Mature decisions must be taken," Modi said when asked whether he would bar FDI in multi-brand retail.
While the government allows 51% FDI in the retail sector, it comes with multiple riders that make operations tough for companies keen to do business in India.
In April this year, Wal-Mart announced that it would invest in opening 50 cash and carry stores in India under the name BestPrice Modern Wholesale over the next five years Wal-Mart entered India in 2007 through a joint venture with Bharti Retail, an alliance that it exited last year.
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