Walmart stops India expansion, may not partner with Bharti

After the recent lobbying controversy, Walmart

has put a brake on retail expansion in India. As per industry sources, it is not planning to apply for its first retail store licence before March 2015. The company has said it needs further 12 to 18 months after winning government approval to open each store, which means its first retail outlet in the country would open not open before 2016.

Meanwhile, Bharti Enterprises, its local partner in an existing wholesale business, is said to be relooking at their commitment with Walmart owing to the heavy investment requirement and distant prospects of returns. While both the companies have denied the news, if Bharti decides to pull out, Walmart would be forced to find a new local partner to meet the requirement that a local firm owns 49 percent of the business.

The Bharti Walmart wholesale joint venture lost Rs 277 crores on sales of Rs1,880 crores in 2011. Walmart’s internal crackdown on bribe-paying has also slowed expansion plans in a country where paying bribes is seen as a standard cost of doing business. More than 15 attorneys from US law firm Greenberg Traurig are now working with the Indian business to help strengthen compliance, a Walmart spokeswoman said. Walmart, which has run wholesale stores in India since 2009, has not opened a new one since October despite its stated plans to open eight in 2013. It has 20 such stores in India.