| Legal issues such as brand agreement, franchise arrangement may take some time to be sorted out.
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| The Bharti-Wal-Mart retail combine is looking at opening its first clutch of retail stores — around half a dozen — sometime early next year.
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| Bharti Enterprises group chairman and CEO Sunil Mittal today said: “We will start rolling out stores from next year and may put up several hundred stores over four to five years”.
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| “The legal issues such as brand agreement, franchise arrangement may take some time, as there are multiple agreements such as technology, franchise and joint venture. But, we are looking at building this as fast as we can. We are going ahead as per the plan,” he added.
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| Bharti has announced that it will invest $2.5 billion in its retail venture, under which it will lead and manage the front end operations, while Wal-Mart will power the logistics and backend operations. Around $100 million has already been committed by Bharti.
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| Mittal had met Wal-Mart Vice-Chairman Mike Duke in Washington during a recent visit to the US at the head of a CII delegation.
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| Asked about reports that Wal-Mart had sought a no-objection certificate (NOC) in advance from Bharti, Mittal said: “This has never been an issue. We have always wanted to retain our partners and never detained them. We have given the rights or NOC in minutes (referring to Vodafone, which recently acquired Hutch).”
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| Earlier, Wal-Mart had said that it was looking to step up sourcing from India and develop a supply chain there. Mike Duke had acknowledged the Indian government’s support for the proposed joint venture.
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| India does not permit FDI in multi-brand retail, but allows 51 per cent foreign direct investment in single brand retail and 100 per cent in cash-and-carry wholesale business. The existing policy also allows FDI through the franchisee route. The Bharti-Wal-Mart joint venture is being structured in consonance with existing FDI policy.
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| Mittal, who also met several business and political leaders in the US, said that the Americans were keen on India opening FDI in multi brand retail.
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| Asked about what the US desired, Mittal said in the beginning they would be happy to see it happen, “maybe with 26 per cent”. |
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