Walmart says 'studying feasibility' day after India spikes calls for change in multi-brand retail FDI norms

PTI Posted online: Monday, Oct 14, 2013 at 0000 hrs
New Delhi : World's largest retailer Walmart says it is studying the feasibility of India's FDI policy in multi-brand retail before finalising plans to enter the segment, as the norms played a part in its break-up with Bharti Enterprises.

"We continue to study the feasibility of the new FDI policy... we continue to monitor the environment for FDI in MBR (multi-brand retail)," Walmart India spokesperson said when asked about Walmart's plans for the multi-brand retail sector in India.

Stating that Walmart plans to continue growing the cash and carry business, the spokesperson said, the company will work "with the government and interested stakeholders to create conditions that enable foreign direct investment (FDI) in multi-brand retail".

On the role played by the current policy in the company's break-up with Bharti, she said: "Under the requirements contained in the new FDI policy, Walmart could not invest in multi-brand retail through the existing Bharti Retail business."

Bharti and Walmart's mutual decision to independently own and operate separate business formats in India is based on external and internal factors, including the new FDI policy, she added.

Last week, Walmart and Bharti Enterprises announced that they were parting ways to operate independently in India, ending their six-year-old partnership.

The US retail agreed to buy out its Indian partner in their 50:50 cash-and-carry joint venture Bharti Walmart, which runs 20 wholesale stores under the Best Price Modern Wholesale brand in India, for an undisclosed sum.

Bharti, on the other hand, will acquire USD 100 million of Compulsory Convertible Debentures (CCDs) held by Walmart in Cedar Support Services, a company owned and controlled by the Indian firm. It will continue to run its 'easyday' retail stores on its own.

Stressing that Walmart is committed to India and the market, the company spokesperson said: "We are pleased with our established and successful cash and carry business and plan to grow that business...and remain steadfast in our belief of the important value Walmart brings to India, including social and environmental benefits."