Walmart Pauses India-Entry; Upset By States’ Veto Power

Concerned over the States’ veto power in matters related to foreign investors’ entry into their states, global retail major Walmart has remained hesitant to enter India.

Walmart and along with the US government officials have met Mr. Anand Sharma, Commerce & industry minister for India. The foreign retail major has conveyed its anxiety over the veto power of the states.

America-based Wal-Mart Stores, Inc., generally referred to as Walmart, was one of the first foreign retailers to enter Indian market. However they remained away from the Indian market. While meeting the Commerce & industry minister they have conveyed their concerns and worries over the veto power of the States in matters related to the foreign investment.

Union Government’s decision to allow more FDI in retail was seen as something that will help India gain better foreign investment. The new policy was meant to woo the foreign investors. They remain skeptic over the policy. Due to lack of clarity over some investment issues, loaded with the veto power of the states, they did not enter into the Indian retail market.

The new policy of the union government permits the foreign retailers to own and set up shops in India. However the government’s decision to limit $100 million as the minimum amount of investment raised confusion. Walmart has asked the government to clarify the term further.

As per the new FDI policy of the Union Government, the foreign retailers can set up shops in India. However they have to get the approval from the state government for this. The state governments are given absolute power to accept them or reject them.

So far only a few states have welcomed the new retail policy. Major states like West Bengal, Uttar Pradesh and Tamil Nadu have already rejected the entry of foreign investors in their states. Further the foreign retailers are afraid that the changing state governments may cause future-troubles to them.

While talking to the media persons, a Walmart representative told that the firm is keen to enter India. He added that the firm will enter India once they are clear about the policy and the veto power of the states.

Post a Comment

You must be logged in to post a comment.