Wal-Mart Boss Hopes India Will Relax Foreign Retail Ban

Foreign groups can only operate as wholesalers and must partner with domestic firms to sell in India

India appears to be moving closer to opening up its vast and potentially lucrative retail sector to foreign investors, the head of the world's number one retailer Wal-Mart said on Oct. 25.

Wal-Mart and French supermarket Carrefour, the world's second largest retailer, and others have been lobbying aggressively to open India's giant consumer market to foreign shopping firms. "I do see progress" Mike Duke, CEO Wal-Mart, said in New Delhi after holding talks with Indian government officials.

Duke's trip to India came ahead of a scheduled visit by President Barack Obama in November during which the American leader is expected to push for relaxation of curbs on foreign participation in the $450 million retail market.

Foreign groups such as Arkansas-based Wal-Mart can currently only operate as wholesalers and must partner with domestic firms to sell in India, amid fears big Western retail chains could swamp small family-run stores.

"Whether or not it (opening the sector) is a done deal is not for me to address," Duke said. But he said he got a "positive feeling" that the discussion over easing retail foreign investment curbs was "moving forward."

India's tight foreign investment rules are aimed at protecting small "mom-and-pop" stores in the sector where less than 10% of consumers shop in big Western-style stores. Only single-brand foreign outlets such as Nokia or Reebok are allowed to operate freely in the country of 1.2 billion people.

India recently kicked off a public debate on allowing foreign supermarkets to open stores in the country.

In a bid to get round India's retail rules -- which critics say are protectionist -- Wal-Mart has entered the back-end retail supply chain in an alliance with Bharti Enterprises, parent of India's top mobile firm Bharti Airtel, which sells mainly to vegetable vendors, hospitals, restaurants and other firms.

Copyright Agence France-Presse, 2010

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