WAL-MART, the world’s largest retailer, expects India to open up foreign direct investment in multi-brand retail given the positive tone coming from government officials, its chief executive said yesterday.
India’s $450bn (£283.17bn) retail sector, with organised retail accounting for just 6 per cent, is largely closed to foreign firms and favours small stores which provide livelihoods for hundreds of thousands and serve a market of more than 1 billion.
But Prime Minister Dr Manmohan Singh’s government has begun to speak more positively about relaxing the rules, despite the potential political backlash this could cause with some of the ruling Congress party’s rural grass-root voters.
“Regarding the timing (of opening up the sector), it is not really my position to set this. It is for the Indian government but the feeling I get is a very positive feeling in the discussions we have had (with government officials),” Wal-Mart Stores Inc CEO Mike Duke told a news conference.
Duke also said he was optimistic about Wal-Mart’s discount store business in the US for the upcoming Christmas season, adding that the company has taken steps to have a more positive shopping season compared with 2009.
“There is still an overhang of concern and that impacts consumers,” Duke said in New Delhi. “Regarding our own business we’re optimistic.”
Wal-Mart, in an equal partnership with India’s top telecoms group Bharti Enterprise, operates four cash-and-carry outlets in India and also supplies to retail stores run by Bharti.
The joint venture plans to open a fifth store late in November or in early December this year.
Duke declined to say how the world’s largest retailer would react to a sudden decision to open up the Indian retail sector.
“Depending on the outcome (of any government decision) we will look with our partners as to what the next steps are.”
Wal-Mart has long been courting the Indian government, the private sector and local farmers to win support for removing restrictions to foreign companies investing in multi-brand retailing in the world’s second-most populous country.
Duke met India’s commerce minister as well as the deputy planning commission chief, who is in charge of initial proposals on how to relax FDI limitations in India’s retailing sector.
