Walmart up for a mega investment into India as it lobbys hard with govts. to allow FDI in multi-brand Retail sector

Wal-Mart, the largest retailer in the world has solicited the support of the US government for entering the multi-billion dollar retail market in India where FDI regulations are a major setback to its entry. The world’s largest retailer is understood to be keen on investing in India but is yet to make a breakthrough as FDI regulation tie it down. With a population of nearly over a billion, the Indian retail market is the largest in the world and is viable for mega investments due to the fact that India’s economy is an emerging and impressive one.

The US based Wal-Mart stores being one of the world’s highest revenue grosser with over $400 billion of cumulative per annum sales; and a presence in 15 countries; is currently lobbying hard with congressmen to help it expand its business into India, probably through bilateral talks between the related authorities of the two countries. If successful, this would be another major foreign direct investment inflow into India which has become a major FDI magnet amongst the developing nations.

The company is in talks with the US Congress, the Department of Commerce, Trade and the Treasury amongst other stakeholders to forward its case on issues such as “discussion on India and Foreign Direct Investment” and “enhanced market access for investment in China and India. Wal-Mart’s presence in India has been limited to business-to-business wholesale market and back end supply chain management business via a joint venture with the Indian retailer Bharti Group.

Wal-Mart has been trying unsuccessfully, for quite a number of years, to enter the Indian retail market but has been hindered by the Indian FDI regulations that do not allow multi-brand FDI in the retail sector which is Wal-Mart’s specialty. In August 2007, Wal-Mart signed the JV with Bharti Retail and soon began its lobbying efforts with US lawmakers.

According to the lobbying disclosure reports the company filed with Congress, the company has since spend over $11 million (more than Rs. 52 crore) on aspects relating to India and other matters in over two years. This year, the company estimates to have spent $1.37 million, over Rs 6 crore on lobbying alone in the first quarter.

The latest quarterly disclosure report came amidst speculation that the Indian government might soon propose to allow from 51% to even up to a 100% FDI in multi-brand retailing. Such a move would definitely allow Wal-Mart a clear entry into the Indian retail market. The Indian Trade and Commerce Minister confirmed these speculations last week but said that the government note is still under ministerial consultative sessions and would be released later.

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