Commerce and industry minister Anand Sharma on Sunday said that Indias foreign direct investment (FDI) policies are not company-specific and have been framed keeping in view the interest of all stakeholders.
Sharmas comments were a reaction to US retail giant Walmarts announcement that its partnership with Indian partner Bharti is not tenable.
These are business decisions to be made by them. It is unfortunate if they dont look at the potential of the Indian market. Indias FDI policy cant be company specific, Sharma told The Indian Express.
Early Sunday,Scott Price,Walmart Asia CEO,who was attending the APEC conference in Indonesia,had told Reuters that the company had created a franchise in retail with Bharti hoping that there could be a potential freeing up (of FDI) that would allow it to potentially be the base of the business. But frankly,the FDI has passed. That means the existing franchise to Bharti is not tenable as the base.
The US retailer is in an equal stakes joint venture with Bharti under which it runs its Best Price Modern Wholesale Stores in India.
Although India permitted 51 per cent FDI in the multi-brand retail sector in September 2012,the apprehensions regarding the rules has deterred the big retailers to announce their plans for Indian market. The biggest stumbling block has been the mandatory 30 per cent sourcing from local units.
To woo foreign retailers in the sector,the government had earlier during the year,relaxed norms,by changing the definition of small industries,changing the criterion for cities where such retail chains can open stores,along with the conditions relating to mandatory back-end infrastructure.
However,the government had not altered the local sourcing norm though Walmart had reportedly told the government that it can procure only 20 per cent from small industries as against the 30 per cent procurement norm.
On the sourcing issue,Price said,… dont see how any foreign retailer can comply and quite honestly no domestic retailer is complying either.
Sharma said that Price would be meeting him in mid-October and he would ask him in what context these comments were made.
I dont think it is proper on his part to comment on domestic retailers. It is very important that farmers,MSMEs feel part of the policy, Sharma said.
Walmart is also under probe in India for alleged bribing of Indian officials. The one-man committee headed by Justice Mukul Mudgal investigating these allegations had submitted its report to the Cabinet Committee of Economic Affairs last Thursday.
The report had stated that that in the absence of material evidence it was not possible to conclude whether Walmart had broken the law. The panel,however,did not give a clean chit to the company and has suggested that the case could be investigated further based on fresh disclosures made by Walmart to the US Congress.
The Union Cabinet is yet to take up the report.