The Hindu : National : Entry will be examined, says Kamal Nath

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Wednesday, Nov 29, 2006
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Entry will be examined, says Kamal Nath

Special Correspondent

New Delhi: Commerce and Industry Minister Kamal Nath on Tuesday declared that the entry of Wal-Mart into the Indian market in a tie-up with the Bharti group would be examined to ensure that it adhered to permissible limits on foreign investments.

Speaking just a day after the U.S. retail major announced plans to enter the Indian market in a partnership with Sunil Mittal's Bharti group, he said, "We will have a look whether permissible limits have been adhered to."

Asked if Wal-Mart was making a backdoor entry into the Indian retail market through its tie-up with Bharti, Mr. Nath said, "We will see whether it is as per rules and regulations." In addition, he said the government would see whether farmers would benefit from the agreement and what impact it could have on local neighbourhood stores. At the same time, he stressed the government was keen to attract foreign investment in logistics and supply chain.

The collaboration between Wal-Mart and Bharti was announced on Monday but the details have not yet been made public.

Under the existing regulations, FDI in the retail sector is allowed in the wholesale trade as well as in logistics and back-end support. The collaboration between Bharti and Wal-Mart is said to envisage that Bharti would manage the front-end of the business, while Wal-Mart would take care of the supply chain, logistics and other back-end operations.

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