Walmart and its joint venture partner in India, Bharti Enterprises, are parting ways after six years, the companies announced.
Plans call for Walmart to acquire Bharti’s 50% stake in their joint venture begun in 2007 to operate cash and carry wholesale stores branded as Best Price Modern Wholesale. At the time, that was the only sector of retail where Indian law allowed for foreign direct investment. The first Best Price store opened in 2009 and today there are 20 units spread throughout India.
Until a change in Indian law last year, Walmart was precluded from owning a majority stake in other retail operations that directly served consumers. However, even with the change, foreign retailers balked at increasing their investments because of an unworkable stipulation that required foreign retailers to purchase 30% of merchandise from local small and medium-size businesses.
“Through Walmart’s investment in India, including our cash and carry business, supply chain infrastructure, direct farm programme and supplier development, we want to serve India and its people, and continue to make important social and environmental contributions to the country,” Walmart Asia president and CEO Scott Price said in a statement announcing the separation from Bharti.
Walmart is committed to businesses that serve members and provide good returns for our shareholders, and will continue to advocate for investment conditions that allow FDI multi-brand retail in India, according to Price.
Commenting on its separation from Walmart, Bharti Enterprises vice chairman Rajan Bharti Mittal said, “Bharti is committed to building a world-class retail venture and will continue to invest in Bharti Retail across all formats. We believe that with our current footprint of 212 stores, we have a strong platform to significantly grow the business and delight customers.”