![](\"..\/images\/spacer.gif\"){kind=spacer}
Chaitali Chakravarty & Sagar Malviya, The Economic Times\n<\/i><\/p>\n
Chaitali Chakravarty & Sagar Malviya, The Economic Times
\n<\/i><\/p>\n
Mumbai\/New Delhi, 29 April 2016<\/i><\/p>\n
![\"\"](\"..\/images\/walmart.jpg\")
Walmart,\nthe world’s largest retailer, is interested in selling food products\ndirectly to Indian consumers both by setting up brick-and-mortar as\nwell as online stores, but it will take a final decision after\nevaluating the policy guidelines that will be notified by the\ngovernment, said the head of its India unit.
“The business of\nbrick-and-mortar food retail stores and online sale of food products is\nof interest to us, but we have to evaluate the policy guidelines once\nthey are notified,” Walmart India Chief Executive Krish Iyer told ET in\nan exclusive interaction.
The government announced its\nintention to allow 100% foreign direct investment (FDI) in ‘marketing\nof food products manufactured and produced in India’ in the recent\nBudget. The final rules will have to be approved by the Union Cabinet\nbefore they are notified. “Never in the Budget has the government taken\nso much interest in retail, and it is encouraging. 100% FDI in food\nmarketing is a progressive step,” Iyer said.
“100% FDI in food\nmarketing will provide better realisation to farmers and bring down\nprices of essential commodities,” said the India head of Walmart, which\nso far does not sell directly to consumers in India. It operates 21\ncash-and-carry stores, with small retailers and businesses being its\nmain customers. The retailer plans to open another 50 such outlets in\nthe next three years.
The company sources its own brands —\nMembers Mark and Right Buy — from within the country, something that\nsits well with the ‘Make in India’ initiative.
“Private label\nwill be a huge differentiator in terms of bringing store footfalls.\nThey are being made in India and benefit customers in terms of lower\nprices and better quality,” Iyer said, adding private labels will have\nan important role to play in food retail.
In-house brands\naccount for 20-30% of sales and nearly half the profits of most\nretailers. With 60% of this coming from food alone, several Indian\nretailers are now present in more than a dozen food and packaged\ncommodity product segments.
The Department of Industrial Policy\n& Promotion has moved a Cabinet note and industry officials believe\nthat final rules will be approved in 4-8 weeks. They are hoping that\nbesides brick-and-mortar stores, the government will allow online\nretailing of food products and will also expand the definition of food\nto include grocery.
Iyer, who joined the Indian unit of the\nworld’s largest retailer two years ago, said food items along with home\nand personal care products would make the model more viable. Walmart\nhad entered India a decade ago in a 50:50 cash-and-carry joint venture\nwith the Bharti Group. This foray was seen as a first step by the US\nretailer towards eventually opening its own stores to sell directly to\nconsumers, once government policy was suitably amended.
But the\nmove to open up the retail sector to foreign investments got mired in\npolitical controversy. While the United Progressive Alliance regime\neventually allowed 51% FDI in the sector, Bharatiya Janata Party has so\nfar been opposed to allowing foreigners to open multi-brand retail\nstores in the country.
“Retail\nis a local business and it won’t work without local leadership or by\nfollowing global templates. But given Walmart’s history, they would\nwant to enter retailing alone as it will give them confidence on the\nexpansion strategy as well as proper control,” said Devangshu Dutta,\nchief executive at retail consultancy Third Eyesight. “Even if FDI is\nallowed completely, the caveats or riders will mostly support local\nbusiness.”<\/span><\/p>
![\"\"](\"..\/images\/walmart-betting-big-on-india.jpg\")
<\/div>