Blog: Wal-Mart raises stakes with India venture
Dean Best | 8 August 2007
In terms of direct investment into the retail sector, India remains a closed shop for foreign firms.
Nevertheless, Wal-Mart’s move into the country’s wholesale business is a smart move from the US retail giant.
Wal-Mart’s cash-and-carry venture with Indian conglomerate Bharti Enterprises – announced on Monday after months of negotiations – should leave the company handily placed if the Indian government allows foreign retailers to expand.
And by partnering with Bharti, which, for instance, owns India’s largest mobile phone network, the venture should be able to tap into a wide distribution network in a country where transportation remains a key challenge.
However, German retailer Metro, one of Wal-Mart’s fierce global rivals, already has a strong foothold in India with a presence in a number of states.
If and when the Indian government gives the green light for multinational retailers to wade into the country’s retail sector, there will surely be a fierce fight for the wallets of India’s ever-burgeoning middle class.
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