Wal-Mart International chief John Menzer has met Indian prime minister Manmohan Singh and commerce minister Kamal Nath to lobby for permission to enter India’s tightly-controlled retailing sector, the the Calcutta Telegraph newspaper reports.
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Nath has been a strong supporter of foreign direct investment up to 26% in retailing, the paper said.
Menzer said Wal-Mart will source $1.5bn of goods from India this year for the 11 countries where it has a presence, which compares poorly against $18bn of imports from China, where it already has a base.
“We expect a 30% rise in India this year,” said Menzer, pointing out that the low cost was a big attraction for Wal-Mart.
Menzer has indicated that the world’s largest supermarket chain will outsource more from India if it gets to set up base in the country.
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By GlobalDataSeeking to allow FDI in the booming Indian retail sector, Menzer said, “We had a good meeting with the Prime Minister. I hope there will be a change in the FDI policy and we are allowed to come in.”
He said Wal-Mart wanted to “invest significantly” in India for opening stores, apart from continuing outsourcing from the market.
Asked if the world’s biggest corporate entity was open to investing once the government allowed 26% FDI through a joint venture, he said, “Let’s see what the government offers.”
Allaying fears that opening of the sector for international players would lead to the closure of small and medium-sized local retailers, Menzer said, “The Indian economy is fantastic; there is room for everyone.”
Menzer reckoned that India was an attractive market for Wal-Mart in sourcing products. “It is the fastest-growing export market for us globally,” he added.
Menzer said Wal-Mart sources goods like apparels and home furnishing from Indian textile firms apart from other products like jewellery.
He laid emphasis on farm produce or the food sector, as one area where his company “could help”. “By having a retail base here, we will be close to the market. Much of the fruits and vegetables in India are spoilt because they are not preserved. We can take care of this by investing in cold chains,” he said.
