New Destination

New Delhi, Feb. 22: French retail giant Carrefour will enter the Indian market as a cash-and-carry, or wholesale, trader.

In response to a questionnaire sent by The Telegraph, Carrefour said it “confirms its decision to enter the Indian market with a cash-and-carry business model as allowed by Indian legislation”.

The company is also in the final phase of negotiations to select an Indian franchise partner for its other retail formats.

Indian law allows foreign direct investment in the cash-and-carry wholesale business and in single-brand retail. Germany’s Metro has already taken advantage of this route to set up cash-and-carry stores in Bangalore.

But the law does not allow foreign investments in front-end retail, a ban which Wal-Mart circumvented by tying up with Bharti.

Wal-Mart will be the back-end supply and logistics manager for Bharti’s countrywide retail operations.

Carrefour officials said, “The first warehouse and retail store will come up by the second half of 2009.”

This implies Carrefour is combining the Metro and Wal-Mart models to enter India.

Carrefour said it was in talks with two to three groups in India for the front-end retail business venture.

Sources, however, said only two serious partners had emerged — the Wadias and Reliance — and Carrefour would probably go for the Wadias.

A Wadia group spokesperson said she would require more time to respond to queries on the issue.