Govt fine with Bharti-Wal-Mart deal
The Govt finds that the tie-up between Bharti and Wal-Mart for retail business conforms to all FDI policy norms.india Updated: Jan 15, 2007 17:01 IST
Having re-examined the tie-up between Bharti and Wal-Mart for retail business following political opposition, the government has found that the big-ticket venture conforms to all FDI policy norms.
"We have examined the Bharti-Wal-Mart joint venture and everything is in conformity with the existing policy on FDI in retail," high-level sources in the Commerce and Industry Ministry said.
With the government finding no fault with the venture, the stage is now set for other global retail chains like Tesco of UK and Carrefour of France to sew their deals for foray into the growing Indian market with similar arrangements.
As the government had last year put the FDI in wholesale cash and carry on the automatic route, Bharti-Wal-Mart project is not required to seek government approvals. Similar route is open to others, the sources said.
The partnership will involve two joint ventures. While Bharti would be managing the front-end that involves opening retail outlets, the US-based world's largest retailer would take care of the back-end such as cold chains and logistics.
The two firms had announced their venture in November. But following opposition from various quarters such as CPI(M), Commerce Minister Kamal Nath had said the government would examine whether the tie-up adhered to existing FDI guidelines.
Similar model is being examined by Carrefour which is reportedly in talks with the Wadias. Tesco, which was earlier talking to Bharti, is also looking for an Indian partner.
Having allowed FDI in cash and carry and single brand retail, the government is now likely to open up foreign direct investment in specific areas such as sports goods, electronics and stationery.