A day after global retailer Wal-Mart announced a tie-up
with the Bharti group for an entry into the Indian market,
the government said it would examine whether the retailing
venture is within the "permissible limits" of
While foreign investment is permitted in wholesale trade
as well as logistics and back-end support, the government
has not allowed FDI in multi-brand retail format.
"We will have a look (at) whether permissible limits
have been adhered to," commerce and industry Minister
Kamal Nath said on the sidelines of the India Economic
Summit. "We will see whether it as per rules and
regulations." The government will see the possible
benefit to farmers and its impact on local neighbourhood
stores, he added.
Under the joint venture arrangement, Bharti would manage
the front-end of the business, while Wal-Mart would take
care of the supply chain, logistics and other back-end
CPI(M) has opposed the tie-up between Wal-Mart and Bharti
Enterprises saying this was not possible under the existing
policy framework and would amount to the entry of FDI
in the retail sector through the "backdoor".
"This agreement is not permissible under the existing
policy on foreign investment in India. It is an attempt
to circumvent the existing policy regulations to gain
a foothold in the Indian market", CPI(M) leader Basudeb
Acharia said in the Lok Sabha during zero hour .
Demanding government's effective intervention to ensure
did not enter the retail sector through the backdoor,
he said the move would "definitely displace massive
number of retailers and squeeze the domestic manufacturers
by its (Wal-Mart) massive buying power" and create