Commerce and industry minister Anand Sharma has deferred his November 1 meeting with Wal-mart Asia CEO Scott Price due to scheduling issues.
When asked, Sharma said: ďWe always welcome foreign direct investment in the country. We welcome all foreign investors. The meeting was deferred and would be fixed on an appropriate date.Ē
Industry circles, however, interpret the move as the governmentís way of expressing displeasure following Wal-martís move to break away from its Indian JV partner, Bharti Enterprises. Earlier, it was held that Bharti and Walmart would be the first companies to form a JV in the front-end retail segment. The Centre was keenly looking forward to it as not a single proposal from any global major had so come far after it allowed foreign investment of up to 51% in September 2012.
The company had sought the meeting shortly after it called off its cash-and-carry Jv with Bharti in early October. Though the company had not disclosed the reason for the meeting, speculation was that it wanted to discuss issues related to "sourcing" with the minister, so that it could plan its entry in the multi-brand retail sector.
Wal-mart has had a series of meetings with the dipp officials, in which it had expressed its inability to meet the mandatory 30% sourcing clause from Indian medium and small enterprises. It had said that it can at best source up to 20%. However, the government was not agreeable to changes in the clause.
DIPP had, though, asked the retail giant to come up with its own sourcing model, including ways of indirect sourcing but within the contours of the existing norm of sourcing at least 30% from Indian SMEs. Sources said the Centre may have offered a solution through which Wal-Mart could source 20% directly and the rest 10% through agents. But the break-up with Bharti seems to have dashed the officialís hopes on the company's plans to set up front-end retail outlets in the country.