Food-only stores on hold as Walmart India evaluates model per FDI rules

Clearing the air of rumors about Walmart scrapping plans to set up food-only stores in the country, Walmart India said that the company is yet to come up with a final decision and is still at an evaluation stage.
Responding to Indiaretailing Bureau’s email query, President & CEO Walmart India, Krish Iyer, said, “We are still evaluating the model as per the guidelines announced.”
“The decision by the Government to allow 100 per cent FDI under Government approval route, including through e-commerce in trading of food products manufactured and/or produced in India is very progressive and far reaching. This will help in reducing wastage, helping farm diversification and encourage industry to produce and manufacture locally within the country. It will benefit farmers, give impetus to food processing industry and create vast employment opportunities in the country.” he said, without disclosing much about the company’s future plans.
Under the current foreign direct investment (FDI) policy, India has allowed global retailers to sell multi-brand ‘food’ products through both traditional stores and online channels as long as they are sourced and manufactured in the country. The policy, however, does not allow such stores to stock general merchandise items such as soaps, shampoos and non-food items.
Read: Walmart shifts focus to e-strategy, will go easy on store openings and profit
Which had become a matter of concern for retailers who had lobbied for relaxation on these lines as selling food alone wouldn’t make business sense and they needed to be allowed to offer more to shoppers.
Government May Include Non-Food Items
As for Walmart, which currently operates 21 Best Price Modern Wholesale stores in India, there is a news to cheer about. Food Processing Minister Harsimrat Kaur Badal has recently pitched for permitting sale of non-food items.
The government is considering allowing stores which would attract FDI to sell personal and home care products up to 25 per cent of their total turnover.
“The ministry has sent a request that a foreign investor should be allowed to keep non-food items in their stores if they invest a certain percentage in creating “farm gate infrastructure”. Since people want some non-food items should be allowed, that is a call the Cabinet will take,” Badal, was quoted as saying by PTI.
“All global players are interested to enter India. We have a $600 billion retail market out of which 60% is food. This sector will treble by 2020 and no country can ignore us,” she added.
Walmart has had a complicated pathway ever since its inception in 2009. The anti-bribery compliance program led to a major part of its stagnant expansion growth in India which ultimately led to its split with its wholesale retailer partner Bharti Enterprises in October 2013.