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Further Penetration In India Coming For Walmart

Posted on | May 28, 2011 | Comments Off on Further Penetration In India Coming For Walmart

India will further relax its rules for foreign investment in retail possibly by 2012. Current law limits foreign retail investment to operating wholesale stores or 51% ownership in single-brand retail stores. The intention is to protect local store owners.

Walmart operates a handful of wholesale stores currently in the country, but will indeed expand quickly as laws are relaxed.

Food prices are one of the driving factors for Indian officials to possibly relax retail laws.  International companies like Walmart can bring expertise in supply chain management and technology to improve distribution of products, specifically food.  About 40 percent of India’s fresh food - fruit and vegetables - rot before they can be sold to consumers due to the lacking of cold-storage facilities and transportation infrastructure.

India represents one of the largest emerging markets for foreign companies and essentially the largest untapped market for retailers.  The opening up of the Indian market is a slow, long-term process but most view it as a matter of when, not if.

Look for India to be a major contributor to international growth for Walmart in the years and decades ahead.