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Wal-Mart studying FDI norms post split with Bharti

US multi brand giant Wal-Mart and Indian firm Bharti have parted ways with the US firm blaming largely India’s foreign investment rules as a reason for the split. The companies would “independently own and operate separate business formats,” ending an alliance that sought to build Wal-Mart’s presence in India’s potentially lucrative retail sector since 2007. Wal-Mart has reportedly told a foreign agency in India that the decision to split with Bharti was based on “external and internal factors, including the new FDI policy.  

    “Under the requirements contained in the new FDI policy Wal-Mart could not invest in multi-brand retail through the existing Bharti Retail business,” a Wal-Mart India spokesperson claimed.

Analysts claim the split between Bharti and Wal-Mart reveals more than it hides, ie the  government needs to do more to improve FDI rules to attract overseas companies and spur economic growth that has slid to a decade-low.  “From a destination perspective, foreign firms want to be in India. But from a policy and doing-business perspective, it is different. The government needs to do more to facilitate this,” an independent consultant with full knowledge of FDI rules claimed.


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