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Walmart Eyes Expansion in India

Bharti Walmart, a joint venture between Bharti Enterprises, an India-based business group, and Walmart, announced plans to open 10 to 12 new Best Price Modern Wholesale cash-and-carry stores, which will employ approximately 3,000-4,000 people, by end of t

Bharti Walmart, a joint venture between Bharti Enterprises, an India-based business group, and Walmart, announced plans to open 10 to 12 new Best Price Modern Wholesale cash-and-carry stores, which will employ approximately 3,000-4,000 people, by end of this year.

Last week, the Indian cabinet approved a 51 percent foreign direct investment (FDI) in multi-brand retailing and an 100 percent FDI in single-brand retailing, opening the door for hypermarkets and supermarkets such as Walmart and Tesco.

“Allowing 51 percent FDI in multi-brand retail is an important first step,” says Raj Jain, Walmart India president and managing director and chief executive officer of Bharti Walmart. "We are grateful that the government has realized and appreciated the value that we will bring to strengthen the Indian economy. This change will positively impact the Indian market and our people. It will also contribute toward India’s image as a one of the world’s fastest growing economies and a welcoming destination for international businesses.”

Global retailers are waiting for a consensus on the cabinet's plan to be reached in the Indian parliament, however.

The legislation would open the retail sector in 53 cities each with a minimum population of 1 million. Big Bazaar, a chain of hypermarkets owned by the India-based Future Group, has already introduced the format to the territory, opening over 120 outlets in less than 10 years.

The proposed FDI policies require a minimum investment of $100 million with at least 50 percent investment in back-end infrastructure such as cold storage, distribution, and logistics infrastructure across the country. Local sourcing requirements are included in the plan as well.

“We are willing and able to invest in back-end infrastructure that will help reduce wastage of farm produce, improve the livelihood of farmers, lower prices of products and ease supply-side inflation, thus saving people money so they can live better,” says Jain. “We also believe that extending the scope of this policy beyond cities with 1 million in population will bring immense benefits in the form of jobs and access to quality merchandise at great prices. It will also supplement our efforts to build an efficient and sustainable supply chain with regional geographical synergies.”

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