A recent break-up with erstwhile partner Bharti, and a probe over corrupt practices at its Indian arm notwithstanding, the world's largest retail store Wal-Mart has spelled out an ambitious long-term plan to shore up its presence in India.
On Tuesday, Wal-Mart said it would set up 50 "cash-and-carry", or wholesale, stores in the next four-five years to add to its current tally of 20.
In the cash-and-carry format, stores sell directly to traders from their warehouses, where typically cash is paid on the spot and goods are taken away by purchasers themselves.
The first outlets would be opened in the states of Maharashtra and Andhra Pradesh, according to a Reuters report.
The announcement came a day after the BJP, the party widely believed to be in the best position to form the next central government, spelt out its election manifesto and reiterated its long-pursued stance against foreign direct investment in the retail sector.
There has not been political opposition to foreign ventures entering the wholesale format and under the incumbent Congress regime, FDI in retail was recently allowed but a veto option was vested with state governments, many of which chose to not allow it. (The recent, short-lived Delhi government under Arvind Kejriwal even reversed the previous government's decision to allow FDI in retail in the city-state).
The policy uncertainty has kept foreign retailers on tenterhooks, with only British retailer Tesco deciding to enter and getting permission to set up retail stores in the country (in a joint venture with Tata's Trent).
Wal-Mart's stay in India has also been chequered, amid allegations that it tried to lobby Indian lawmakers to twist local laws and with the eventual break-up with Bharti.
"We are evaluating and reinforcing procedures and programs relating to all compliance areas, including licensing and permits, food safety, and responsible sourcing among others," Scott Price, president of Wal-Mart Asia, said in a statement.
The decision to up the number of wholesale stores in the country and strengthen its backend underlines its bullishness and intent over the Indian market, whose retail sector was pegged at USD 500 billion by a Washington Post report.
Separately, Wal-Mart would also set up an e-commerce website from which it would also sell to small traders and shopkeepers.
The company has recently invested Rs 1,328 crore setting up a new subsidiary, Wal-Mart India, while also buying out the remaining 50 percent stake in the six-year-old joint venture that was previously run with Bharti, a report in the Economic Times said.
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