New Delhi, Oct. 31: In a possible rebuff to global retailer Walmart, commerce minister Anand Sharma has cancelled a meeting scheduled for tomorrow with Scott Price, the Asia head of the US retailer.
The meeting has been cancelled as the retailer has not come up with concrete plans for its entry into the multibrand retail segment in India, a senior ministry official said.
Walmart representatives have met ministry officials and the minister on a number of occasions.
“Every time they raise one or the other new issue relating to FDI norms, but have not conveyed what exactly they want,” officials said.
The US retailer was earlier snubbed by finance minister P. Chidambaram.
“Walmart will be a speck in India’s retail market. India’s retail market is driven by millions of standalone stores. It has been strengthened by Indian retail chains. So why do we assume that Walmart will make a huge difference to India’s retail market?” he had said.
Later in the evening, a PTI report quoted Sharma saying, “We always welcome foreign direct investment in the country. We welcome all foreign investors. The meeting (with Walmart) was deferred and would be fixed on an appropriate date.”
Price was slated to meet Sharma after the break-up with partner Bharti Enterprises to discuss sourcing norms for multi-brand retail.
Walmart wants clarity on whether the government will relax the mandatory 30 percent local sourcing norms for foreign players in the multi-brand retail sector.
Under current norms, a foreign retailer has to mandatorily source 30 per cent of the value of its products from small- and medium scale enterprises.
Sources said the US retailer was keen on the inclusion of private labels under the local sourcing norms.
“By inclusion of private labels in the sourcing clause, Walmart believes that it will be able to comply with the FDI policy,” they said.
Private labels are sold by retailers at a discounted price. They bring substantial revenue as expenses on marketing and advertising are not significant.
Saurabh Chandra, secretary in the department of industrial policy and promotion, has said, “The FDI policy cannot be company specific. We have put in place an enabling regime for the multi-brand retail sector. We have no plans to relax the 30 per cent local sourcing norms.”
In August, the Centre eased the norms by allowing foreign retailers to continue sourcing from the same enterprise, even if it outgrew the investment threshold of $2 million. The government also included agri-cooperatives in the 30 per cent sourcing bracket.
The government opened multi-brand retail to 51 per cent FDI in September last year, but no application has come so far. The government subsequently eased many of the conditions based on feedback from potential investors.