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Walmart on Wednesday sought further clarity from the Government on Foreign Direct Investment policy in multi-brand retail including sourcing norms.
Walmart India head Ramnik Narsey met officials from the Industry Department on Wednesday to discuss the company’s plans of investing in multi-brand retail in the country.
Last week, the US-based company’s Asia CEO Scott Price met Department of Industrial Policy and Promotion (DIPP) officials, including Secretary Saurabh Chandra, to discuss concerns related to the existing FDI policy and conditions that would allow the company to invest in the multi-brand retail sector.
Narsey, who had a follow-up meeting with a team of senior DIPP officials on Wednesday, explained the company’s existing sourcing model in India and pointed out the problems that the compulsory sourcing norms in India’s FDI policy could pose, a DIPP official told Business Line .
Walmart is already present in India as part of Bharti-Walmart, a 50:50 cash-and-carry joint venture with Bharti Enterprises, which generates annual revenues worth $500 million.
It was one of the first global companies to express interest in entering the Indian market when the Government allowed 51 per cent FDI in the multi-brand retail sector in September last year.
However, it has not yet invested in the sector as it wants the Government to make the investment norms less stringent. Although, the Centre has recently made several relaxations in the initial conditions imposed on foreign investors, Walmart is looking for more lenience in the sourcing norms.
The condition for mandatory 30 per cent sourcing from the domestic small sector remains in the policy, although the definition of small sector has been expanded to include units with total investment in plant and machinery up to $2 million instead of the earlier threshold of $1 million.
Foreign retailers have also been allowed to retain their vendors even when they outgrow the $2-million investment threshold.
“We continue to study the implications of the current FDI policy on our business and appreciate the Government’s willingness to consider our requests to provide clarity on the conditions contained in the policy,” a company spokesperson said when contacted by Business Line on the proposed meeting.
amiti.sen@thehindu.co.in
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