Walmart contemplates changing India strategy

As reported earlier, Walmart, which is said to be planning

to snap ties with Bharti, its current domestic partner, has decided not to convert the 100-million dollars (over Rs 600 crores) loan it had granted to the holding company of Bharti Retail into equity. As per sources, the retail giant has also pulled out a key person, Mitch Slape, a Walmart veteran and the COO of Bharti Retail from front-end retail operations in India. The developments hint at Walmart’s changing strategy for the country.

The US retailer Walmart had invested 100 million dollars (over Rs 600 crores) in Cedar Support Services, an arm of Bharti Ventures in 2010. And though the government increased the FDI limit in multi-brand retail to 51 percent last year, Walmart may not take advantage of it by converting the 100-million dollars loan into equity, which would have given it an indirect 49 percent stake in Bharti Retail.

For now, Walmart operates cash-and-carry stores in India through a 50:50 joint venture with Bharti and the industry expected the retail major to acquire equity in Bharti Retail, after the government eased FDI rules in multi brand retail. Walmart recently stopped its lobbying with US lawmakers on India-related issues, which it has been doing for the past five years to enter the lucrative Indian market. It had also expressed reservations over 30 percent mandatory sourcing from small industries, a rule under the multi-brand retail foreign direct investment (FDI) in India.