Wal-Mart, the world’s largest retailer, on Monday made a strong pitch for easing of foreign investment norms in India’s retail sector as global retail giants clamour to set up shop in the second fastest growing among major world economies.
“We believe up to 100 per cent opening of foreign direct investment (FDI) would be the optimal solution for all the constituents in India,” Michael T. Duke, president and chief executive officer, Wal-Mart Stores, said on Monday.
Duke’s comments assume significance as they came barely 10 day’s before US President Barack Obama’s visit to India early next month.
“In other countries foreign ownership in retailing has had such a positive impact on consumers, on helping to manage inflation, to farmers and small and medium sized businesses,” Duke said.
FDI in the estimated $400 billion ( about R23 lakh crore) retail sector has been a politically sensitive issue in India.
Domestic traders and Left wing political parties have voiced concern over loss of jobs and livelihood of neighbourhood kirana stores if transnational giants were allowed to set up front-end stores offering deep discounts.
At present, FDI in multibrand retail is prohibited, but India allows 51 per cent foreign equity participation in single brand retail and up to 100 per cent FDI is allowed in wholesale business.
Wal-Mart has a wholesale joint venture with Bharti Retail.
Over the last ten years India has received FDI worth $1.8 billion (R7,799 crore) in wholesale trade. About $200 million (R900 crore) worth of FDI has come into single brand retail in Inda since 2006.
“We met the Union minister of commerce (Anand Sharma) and had a very collaborative, positive and open discussion. Yes I do see progress about allowing FDI in the sector,” Duke said.