The Government on Thursday tightened the screws on international multi-brand retail chains, at a time when they were expecting some relief. It has been clarified that if such global ventures set up shop in India, they are bound to directly own and operate the entity. This means the exit of the franchisee, a move which may have serious repercussion on joint ventures like Bharti Walmart.
According to the Department of Industrial Policy & Promotion (DIPP), any global entity’s multi-brand retail store in India will have to be “company-owned and company-operated.”
When contacted by The Pioneer, a Bharti Walmart spokesperson said they were “studying” the DIPP clarification. The clarification was issued after queries from global retailers, including Walmart, Tesco and Carrefour, on FDI policy for multi-brand retail trading (MBRT).
Department of Industrial Policy & Promotion has also said the mandatory 30 per cent sourcing from small industries will be counted only for sales through the front-end stores.