Bharti, Wal-Mart to float JV 'if allowed'

On the heels of announcing a joint venture for wholesale cash-and-carry business with the world's biggest retailer Wal-Mart, Bharti Enterprises on Tuesday said the two would form a 50:50 partnership for front-end retail if allowed by the government.

"The issue is foreign direct investment in retail is not allowed (for multi-brand). In the event FDI is opened up to 100 per cent, there will be a 50:50 joint venture for front-end retail," Bharti Enterprises Chairman Sunil Bharti Mittal told reporters on the sidelines of the CII Marketing Summit in New Delhi.

He said the partnership would largely depend on the government policy. "If the government allows only 26 per cent FDI, then Wal-Mart will have only 26 per cent."

Asked if Wal-Mart would choose to go alone in case the FDI norms were completely relaxed, he said Bharti was a partner of choice for the US-based

retailer.

"Wal-Mart failed in Korea and Germany, while they are struggling in Japan and relatively doing well in China. They do recognise the need for a local partner," he added.

Bharti and Wal-Mart had announced a 50:50 joint venture for wholesale cash-and-carry business on August 6 to serve small kirana stores besides other big retailers.

Bharti and Wal-Mart would hold equal stake in the joint venture and would focus on setting up supply chain and back-end logistics infrastructure.

The joint-venture's first wholesale store is expected to be opened by the end of 2008, Wal-Mart India President (Operations) Raj Jain had said. "Over the next seven years, we plan to open 10-15 wholesale Cash-and-Carry facilities throughout the country," he added.