India: Tesco and Walmart may not rush in
During a meeting with commerce & industry minister Anand Sharma in Davos on Thursday, British retail giant Tesco sought clarifications on sourcing from small scale units and rolling out of back-end infrastructure for foreign players entering the retail space. The move is seen as a precursor to the supermarket chain deciding on entering the Indian market after the government allowed 51% foreign direct investment in the multi-brand retail segment.
Similarly, Doug McMillon, president and chief executive of the international operations of Walmart told the minister that the global giant is studying the conditions before making a final announcement on its India plans, an official statement said.
Tesco has a tie up with the Tatas, while Walmart has already opened cash-and-carry outlets, in partnership with Bharti, that cater to wholesale buyers such as restaurants, canteens and even small kirana shops. The clause stipulating at least 30% sourcing from local small and medium enterprises is being cited by retailers as a major hurdle to investment into India, although most of them will end up procuring from the domestic market.
There is also the requirement on foreign retailers to invest at least $100 million with 50% meant for creation of back-end infrastructure.
Source: timesofindia.indiatimes.com
