Bharti, Wal-Mart closer to retail JV deal

BY OUR POLITICAL CORRESPONDENT
June 27, 2007

The Bharti Group of India and Wal-Mart of the United States is reportedly closer to finalising their partnership.

The formal agreement is likely to be signed in July 2007, Sunil Bharti Mittal, chairman and CEO of Bharti, said in London.

He said that though there has been a delay because of multiple agreements and legal issues, the company is hiring people and locations are being identified.

Sunil Mittal, as president of the Confederation of Indian Industry (CII), is currently leading a 12-member delegation to the United Kingdom. The delegation held a series of discussions with British businessmen and invited them to invest in India, particularly in infrastructure and food industry.

Wal-Mart and the Bharti Group are expected to enter into a joint venture for the cash and carry segment, which will involve selling to wholesale consumers, mostly small shop owners. For selling to retail consumers, Wal-Mart is expected to enter into a technology transfer agreement with the Bharti Group.

The two are also expected to collaborate in terms of sharing processes and best practices.

The news of the imminent signing of the deal between the Bharti Group and Wal-Mart comes amid widespread resentment in India against entry of foreign retailers and reports of the Indian government re-examining franchisee arrangements.

Sunil Mittal has been cirtiticised on the issue of foreign direct investment (FDI). He is strongly in favour of allowing large in FDI in retail.

The concern in India is not only on the question of foreign and Indian investment but also about big versus small. Mittal said in London that “if large Indian retailers like us, and Reliance, and the Birlas are allowed, then we would say that more competition is better, and large foreign retailers should also be allowed.”

In London, Sunil Mittal told reporters that the Confederation of Indian Industry expects an upswing in the India-United Kingdom bilateral relations under new British Prime Minister Gordon Brown.

Phiroz Adi Vandrevala, co-chairman of the Indo-British Partnership, said Gordon Brown’s visit to India as Chancellor in January 2007 was “extremely positive.”