Walmart Stores Inc, the world's largest retailer, said it is in talks with Indian partner Bharti Enterprises on its future business plan and aims to reachan agreement in the next few weeks.
Walmart has a "very good" relationship with Bharti and has had multiple conversations with billionaire owner Sunil Mittal in the past few days to determine the next steps, ScottPrice, head of Walmart's Asia operations, said today. His comments come after local media reports in India suggested that Bharti is seeking to exit the joint venture due to Walmart's lack of progress in expanding Indian operations.
"We are having very productive discussions with Bharti,there are multiple options and we are working through what those options might be," Price said in a telephone interview. "I would hope probably in the next several weeks we will reach an agreement with them. But no matter what happens, there is no pressure in the relationship."
"Until the sourcing issue is resolved, I believe no foreign company will apply and can comply," Price said from Bali where he was attending the Asia-Pacific Economic Cooperation forum. He is the chairman of the National Center for APEC, a US business group. "We are not interested in investing until that's clear."
While the nation changed laws in September last year to allow foreign retailers to own majority stakes in multi-brand retail chains, no global retailers have sought such licence yet. The government also loosened rules covering sourcing, infrastructure investment and store location in August, in an effort to woo Walmart, Tesco Plc and other global chains toopen retail stores in Asia's third-biggest economy.
Under the recently amended rules, foreign-owned retailerswill have to buy 30 percent of manufactured products from small-and medium-sized local firms with less than $2 million invested in factories and machinery.
Earlier rules were stricter, defining "small and medium" companies as those with investments of under $1 million. Even after these changes, the entry barriers for foreign retailers "aren't workable," Price said.
Walmart's Asia head said these rules still don't provide a level playing field for international retailers compared to local rivals, and the need to comply with them is the "biggest sticking point" holding back the company's foray into traditional retail in India.