Wal-Mart, India's Bharti to announce joint venture
MUMBAI (Reuters) - Wal-Mart (WMT.N), the world's largest retailer, is set to announce a much-delayed deal with Bharti Enterprises (BRTI.BO) for an Indian venture that will give it entry into a fast-growing but highly controlled market.
The two companies will hold a joint news conference in New Delhi at 3:30 p.m. (6 a.m. EDT) on Monday, and a spokesman for Bharti said it was to announce a joint venture with Wal-Mart for a cash-and-carry, or wholesaling, venture.
Raj Jain, president of Emerging Markets for Wal-Mart and Rajan Mittal, head of Bharti Retail Ltd., would address the media, a spokeswoman for Wal-Mart said.
"I would say within August more plans will be unveiled, where Wal-Mart will be very visible upfront to talk to the media," Bharti Enterprises chief Sunil Mittal told channel NDTV Profit.
Mittal also said 6 to 7 sites had been finalized for stores, which would largely be located in the northern and western regions of the country.
In June, Mittal told Reuters that India's limits on foreign direct investment in retail had slowed the signing of the agreement with Wal-Mart.
Wal-Mart had said in February it could partner Bharti on supply chain logistics and technology support. Bharti had first announced plans for a joint venture in November last year.
India permits foreign single-brand retailers to take up to 51 percent in a joint venture with a local firm, while multi-brand retailers like Wal-Mart are limited to cash-and-carry and franchise deals.
India's retail industry, valued at nearly $350 billion, is forecast to double in size by 2015, with modern retail's share of that also quickly increasing from about 3 percent now.
The opening up of the fragmented industry, which is dominated by family-run shops, has triggered political concerns and protests by small shop owners who fear massive job losses.
A visit by senior Wal-Mart officials to India in February sparked protests from shop owners. Later this week, an organization of traders, hawkers, farmers and trade unions has called for protests against what it calls the "corporate hijack of retail and backdoor entry of Wal-Mart."
Other foreign giants like Tesco (TSCO.L) and Carrefour (CARR.PA) have put their India plans on hold until regulation is clarified, amid growing concerns that India could delay moves to lift restrictions.
BIG PLANS
India's Reliance Industries Ltd. (RELI.BO), the Tata group, the RPG group and the Aditya Birla Group are expanding their retail business, a move that analysts say will further limit opportunities for foreign retailers who delay their entry.
"Already, there are too many players coming in all at once, especially in the bigger cities, all targeting the same base of consumers," said Hemant Patel, an analyst at Enam Securities. Continued...
