Wal-Mart Reveals India Plan

The company plans to open 50 cash-and-carry stores in India.

NEW DELHI — Six months after it parted ways with Indian partner Bharti Enterprise Ltd., Wal-Mart Stores Inc. has made a comeback, revealing plans to open 50 cash-and-carry stores in India.

The format, which sells wholesale and not direct to consumers, is expected to be worth $22 billion in India by 2017.

Wal-Mart has 20 stores in India in cities such as Amritsar, Bhopal, Ludhiana and Agra.

Having been at the forefront of the debate over foreign direct investment, or FDI, in the $500 billion Indian retail market, Wal-Mart was expected to be the first to enter the country after FDI in multibrand retail was allowed in September 2012. The Arkansas-based retailer had also supported the view of many global retailers that it was not possible to source 30 percent from small and midsize suppliers in India in order to meet the requirements of India’s FDI rules.

After the Indian government approved 51 percent ownership in multibrand retail, there was a long silence from global retailers for almost a year, including Wal-Mart. Three months ago, Tesco became the first global retailer to reveal a $110 million investment to open supermarkets in India in collaboration with the Tata Group.

Wal-Mart’s continuing silence appeared indicative of the company’s intention to forego the market of 1.2 billion people where the political opinion has been strongly divided on opening up retail to foreign investment. Wal-Mart in particular had been the focus of controversy as the single largest retailer that threatened the mom-and-pop stores that make up more than 90 percent of the retail market in India.

The decision to split with its partner in India in October, and the silence about further plans for the country, appeared to indicate the world’s largest retailer had given up on the market. No stores were opened in 2013, despite an ambitious expansion plan revealed previously. Another blow to Wal-Mart last year was the allegations of corruption over irregularities in foreign investment in India.