Wal-Mart Asia chief to discuss sourcing norms with Anand Sharma on 1 Nov

Wal-Mart’s Asia chief Scott Price will meet Commerce and Industry Minister Anand Sharma on November 1 following the break-up of the US retail giant’s partnership with Bharti Enterprises.

“They have sought a meeting with me. He is meeting on November 1,” Mr Sharma told reporters on Thursday.

Bharti Enterprises and Wal-Mart on October 9 announced the ending of their six-year partnership to operate in the Indian retail sector.

Wal-martwants clarity on whether the government will relax the mandatory 30 percent local sourcing norms for foreign players in the multi-brand retail sector. As per the current norms, aforeign retailer interested in investing in India’s multi-brand retail sector has to mandatorily source 30 percent of the value of procurement or products from small and medium scale enterprises.

The US retail giant Walmart, which has been pitching for relaxing local sourcing norms along with other global players, earlier this month ended its partnership with Sunil Mittal-owned Bharti Enterprises for opening retail stores in the country.

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[caption id=“attachment_1122083” align=“alignleft” width=“380”]  The US retail giant Walmart, which has been pitching for relaxing local sourcing norms along with other global players, earlier this month ended its partnership with Sunil Mittal-owned Bharti Enterprises for opening retail stores in the country. Getty Images[/caption]

Walmart will buy out its Indian partner in their 50:50 cash-and-carry joint venture Bharti Walmart, which runs 20 wholesale stores under the Best Price Modern Wholesale brand in India, for an undisclosed sum.

Bharti will continue to run its ’easyday’ retail stores on its own.

Last month Price met with Department of Industrial Policy and Promotion (DIPP) Secretary Saurabh Chandra.

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According to various reports, Walmart has told the government that it is finalising its proposal to invest in India and it will be a big amount. However, it wanted some clarification on a few aspects of the foreign direct investment (FDI) policy on multi-brand retail including the 30 percent sourcing norm.

However, last week Saurabh Chandra said, “FDI policy cannot be company specific. We have put in place an enabling regime for multi-brand retail sector. We have no plans to relax the 30 per cent local sourcing norms.”

According to a report in the Financial Express, Price plans to make a case for the inclusion of private labels under the mandatory local sourcing norms, a move that is being debated by the department of industrial policy and promotion (DIPP).

“By inclusion of private labels in the sourcing clause, Walmart argues that it will be able to comply with the FDI policy. Private labels, also called store brands, are owned and sold by retailers in their stores at a lower price. They add massively to the revenue because they have no marketing and advertising cos,” the report said.