Bharti Wal-Mart has denied breaking Indian regulations on foreign investment amid reports the country's government will investigate the retailer.

India has recently allowed overseas retailers to hold up to 51% of multi-brand outlets but is alleged Wal-Mart held a stake in Bharti's retail arm before the new rules came into place.

However, allegations claim the world's largest retailer might have entered India's front-end multi-brand retail business two-and-a-half years before the government actually lifted the ban on foreign investors, according to the Hindustan Times.

Bharti has denied any wrongdoing.

A spokesperson told just-food: "We are in complete compliance with India's FDI laws. All procedures and processes have been duly followed and details filed with relevant Indian government authorities, including the Reserve Bank of India."

Earlier this month, Wal-Mart begun talks with Bharti Enterprises over the possible formation of a joint-venture to roll out retail stores in India.

The two companies, which have an equal partnership in the wholesale business in India, are said to be looking to replicate this relationship in the retail business following the government's decision to allow up to 51% foreign direct investment (FDI) in multi-brand retail.