The much touted deal will be finally signed this month amidst concerns expressed by various political parties over the entry of foreign retailers in India.
NEW DELHI: The much touted Bharti-Wal-Mart retail deal will be finally signed this month amidst concerns expressed by various political parties over the entry of foreign retailers in India.
"The deal with Wal-Mart for the retail venture will be signed this month," Bharti Enterprises Chairman Sunil Mittal told reporters after delivering lecture at Foreign Service Institute.
Bharti, which has announced a 2.5 billion dollars investment till 2015 on front end stores, has set eyes on clocking revenues of 4.5 billion dollars from the new business by then.
The company is planning to open its maiden store in the first quarter of 2008 and plans to open similar retail outlets throughout the country.
The proposed investment, however, would only involve setting up of front-end stores, while the company is working out modalities for its back-end linkage, including its joint venture with world's largest retailer Wal-Mart.
While Bharti would manage front-end of the retail venture on its own, the proposed JV with Wal-Mart would be for back-end chains, including logistics, supply chain and cash-and-carry.
As per the plans, the company is looking at 10 million square feet of retail space, which would include hypermarkets, supermarkets and convenience stores. The venture is expected to generate employment for about 60,000 people.
The Bharti-Wal-Mart deal had come under political scanner with UPA Chairperson Sonia Gandhi writing to the Prime Minister advising caution in allowing the global giant's entry into India expressing concern over the fate of small time retailers.
UPA ally Left Parties have also been strongly opposed to allowing multinationals in the Indian retail sector.
Foreign Direct Investment (FDI) in multi-brand retail is prohibited in India, but 100 per cent overseas investment is allowed in cash-and-carry (wholesale) business -- precisely where Wal-Mart would be investing.
Bharti has been maintaining that its joint venture agreement with Wal-Mart would be for cash-and-carry and back-end linkages and asserted that it was within policy guidelines.
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