New Delhi: Global retail giant Wal-Mart's entry into India through a tie-up with corporate major Bharti was sucked into a political whirlpool on Tuesday, with Left parties dubbing the deal as a 'backdoor entry' by the MNC and the government promising to examine it.
A day after the announcement of the deal, which was widely welcomed by the corporate bigwigs including Reliance Industries' Mukesh Ambani, the CPI-M and CPI alleged that Wal-Mart had circumvented the laws of the land to gain entry into this booming market.
Promptly, Commerce Minister Kamal Nath promised to "look at whether permissible limits have been adhered to. We will see whether it as per rules and regulations."
As per the agreement between the two corporate giants, Bharti would manage the front-end of the business, while Wal-Mart would take care of the supply chain, logistics and other back-end operations.
The Left parties have even asked trade unions to launch a nationwide action against the entry of Wal-Mart and other multinational retailers into the domestic market.
"FDI in retail trade in not permissible under the existing policy on foreign investment in India. Wal-Mart's franchisee agreement with Bharti Enterprises is an attempt to circumvent existing policy regulations to gain a foothold in the Indian market," CPI(M) said.
While India has not allowed FDI in multi-brand retail format, foreign investment is permitted in wholesale trade as well as logistics and back-end support.
Nath said the government will see whether farmers would benefit from the agreement and what impact it could have on local neighbourhood stores, adding that government was keen to attract foreign investment in logistics and supply chain.
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