Wal-Mart India JV responds to calls for lobbying probe

By: Michelle Russell - 12 December 2012 16:01

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Wal-Mart's venture in India has moved to distance itself from allegations the US retail giant put pressure on India's government to relax rules on foreign investment in the country's retail sector.

The Indian government is reportedly considering a probe into claims Wal-Mart lobbied the country's politicians. India's government is pressing ahead with a reform of laws governing foreign investment in the retail sector. The new laws will allow foreign retailers to own 51% of multi-brand retail outlets.

The proposals have been voted through India's parliament but have still faced stiff criticism from some politicians and domestic retailers fearful that a wave of foreign investment will hit local jobs.

According to Reuters, Wal-Mart has disclosed it had paid US$25m over four years to lobby US legislators to help them gain access to overseas markets, including India.

The disclosure has resulted in Indian opposition politicians against Wal-Mart expanding further in India calling for an inquiry into whether any of the funds were spent the country.

However, in a statement today, Bharti Wal-Mart, the US retailer's wholesale and cash-and-carry venture in India, said the allegations that a routine US lobbying disclosure form reflects "improper conduct" on its part in India, is "false".

"This disclosure has nothing to do with political or governmental contacts with India Government officials. It shows that our business interest in India was discussed with US Government officials - along with 50 or more other topics during a three-month period."

The group said the disclosures on issues and expenditures are required under US law and that it was not unique to Wal-Mart.

"All organisations which expend more than $11,500 annually on lobbying activities and employ at least one lobbyist must register and file the quarterly reports. Our Washington office naturally had discussions with US Government officials about a range of trade and investment issues that impact our businesses in the US and worldwide and disclosed this in accordance with the law."

Wal-Mart is keen to make its mark in India's $450bn retail market. 

In October, after the Indian government said it would relax rules on foreign investment, Wal-Mart said it had begun talks with partner Bharti Enterprises over the possible formation of a joint venture to roll out multi-brand retail stores in India.

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Wal-Mart India JV responds to calls for lobbying probe

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