Walmart's expansion into India still uncertain
The one-year extension would give Walmart and its Indian joint venture partner in the cash and carry business, Bharti Group, more time to sort things out and decide on a retail foray together, people in the know said. This would allow Walmart to assess the post-election situation as well before giving a final shape to its business plan in India.
Also, Enforcement Directorate (ED) investigation into Walmart’s investment in the Bharti Group company to assess violation of Foreign Exchange Management Act (Fema) is yet to be completed. Without closure of the ED probe, Walmart is unlikely to enter India with its retail stores, a source pointed out.
In March 2010, Walmart had invested $100 million in Cedar, in exchange for a compulsorily convertible debenture (CCD). After several extensions, the American chain had a deadline of September 30, 2013, for converting the CCDs into 49 per cent equity in Cedar, a step that would have crystallised into a front-end retail joint venture (JV).
When contacted on the matter, a Walmart India spokesperson said, “As permitted by law, we have filed for an extension of the conversion date for the CCDs.” On the duration of the extension and by when it would convert the CCDs into equity, she said, “We have nothing further to share at this time.”
Meanwhile, Walmart, which is talking to the Department of Industrial Policy & Promotion (DIPP) on its global sourcing model, while seeking relaxation of conditions in the multi-brand retail policy, might take a call on its broad India strategy soon enough.
Source: business-standard.com
