Walmart Ends India Joint Venture

Walmart Stores Inc. (Bentonville, Ark.) has ended its joint venture in India and put on hold its plans to open its own stores there.

It said that strict government regulations on sourcing from local small businesses continue to make it impossible.

The retailer will continue the wholesaling joint venture in India that it has been running, but on its own after buying out local partner Bharti Enterprises (New Delhi). Walmart will buy Bharti’s stake in the Best Price Modern Wholesale cash and carry business and continue to operate it in India. Bharti will take 100 percent ownership of the retailing joint venture Easyday. Each operation runs about 20 stores across India.

Scott Price, ceo of Walmart Asia, said that the new law’s regulations requiring foreign retailers to buy 30 percent of products from local small and medium-size businesses are the “critical stumbling block” to opening its trademark consumer stores.

“I don’t understand how this 30 percent small and medium enterprise can be executed,” Price said in an interview at the Asia-Pacific Economic Cooperation forum in Bali, according to The New York Times.

He said that Indian retailers were not required to follow the same rule, which makes it too difficult to make money, because no enterprise small enough to meet the government’s requirements has the capability to produce on the scale that a giant retailer requires.