 | « Back to article | Print this article |
US retail chain Walmart is awaiting a decision by its board decision on its India strategy, including its partnership with the Bharti group, it is learnt.
Though internally, high-level discussions on parting of ways between Walmart and Bharti had been held, a formal decision on the matter would only be announced once the company's board met later this month, sources said.
Even at the board level, there are divergent views on what Walmart's India strategy should be. Despite much talk on a likely announcement by Walmart this week, those in the know said it wasn't expected this soon.
In fact, Scott Price, president and chief executive, Walmart Asia, has been in India for the past few days, assessing the situation.
His visit coincides with Bharti group Chairman Sunil Mittal's unexpected statement on the sidelines of a conference in Johannesburg that Walmart could firm up its India strategy in October.
Mittal also said Bharti would take a decision on its retail venture after Walmart announced its stand.
In a related development, the Mudgal committee report on Walmart lobbying was placed for discussion at a Cabinet meeting on Thursday. The committee, instituted to assess whether Indian authorities were influenced in taking decisions favourable to Walmart, closed the investigation due to lack of substantial evidence.
Apart from Walmart's lobbying disclosures to the US Senate, the Enforcement Directorate's probe into the retail chain's $100-million investment in Cedar Support Services, the parent company of Bharti Retail, has been a stumbling block for the American retailer.
Many experts feel Walmart may want to return to India with a clean slate, after a few years.
However, replying to Business Standard's detailed questionnaire on Walmart's India plans and partnership, the company's India spokesperson said, "We've made no announcements and we don't comment on rumours or speculation. India is an important market for us and we continue to study the implications of the new FDI (foreign direct investment) policy on our business." Bharti group did not comment on the matter.
Walmart and Bharti are in a 50-50 venture for cash-and-carry, or wholesale, business in India. Walmart also extends technical and back-end support to Bharti Retail. In the past, the two companies have discussed extending the partnership to front-end, too, as the Cabinet has approved up to 51 per cent FDI in multi-brand retail.
Price has held several meetings with government officials, including those in the department of industrial policy and promotion, on multi-brand retail policy issues. Walmart has sought time till September 30, 2014, for converting its $100-million investment in Cedar Support Services into 49 per cent equity in the venture.
Though sources said the one-year extension sought by Walmart was aimed at buying time, Bharti might not be in a mood to wait any longer.
