Wal-Mart and Carrefour to Enter India with Supermarkets

NEW DELHI, India - Wal-Mart and Carrefour may gain access to the retail market of the world’s second most-populous country as the Indian government is easing restrictions on the retail industry. Overseas companies could be allowed to own as much as 51 percent of stores that sell more than one brand if they invest a minimum of 100 million US dollar.

India currently allows overseas companies 51 percent ownership in retail shops selling only one brand and 100 per cent in wholesale stores. The world’s two biggest retailers Wal-Mart and Carrefour, who already operate wholesale outlets in India, seek to sell in a market that Business Monitor International estimates will be worth 396 billion US dollar this year and may double to 785 billion in 2015.

Wal-Mart, the world’s biggest listed company by sales, buys produce from about 1,200 farmers in the northern Indian state of Punjab. Wal-Mart annual sales in India amounted to less than 1 billion US dollar, compared with 8 billion in Japan and 7.5 billion in China. Bharti Walmart, a venture with billionaire Sunil Mittal’s Bharti Enterprises, runs seven wholesale stores and plans to add as many as 12 by 2012. Paris-based Carrefour set up its first Indian wholesale store in December.

Germany’s Metro operates six wholesale stores in India, according to its website. British retailer Tesco in 2008 signed an agreement with Trent, the retail arm of India’s Tata Group, to set up cash-and-carry stores.

India’s 1.2 billion population, second in size only to China’s, is expected to grow to 1.4 billion in 2026. A growing middle class, expanding economy and increasingly brand-conscious population will help boost retail sales 35 percent over the next three years, A.T. Kearney said in a report last year.