Walmart as well as US government seem concerned over States’ veto power the states have over the Foreign Direct Investment. They have conveyed their concerns, to the union government of India.

Walmart remain cautious to enter Indian Market as the states are given Veto Power.

Wal-Mart Stores, Inc.; generally branded as Walmart, an American multinational retail corporation, as well as the US government has revealed their concern over the veto power conferred to the states by the Union Government of India. Union Government’s decision to confer absolute power to the states; to decide on the matters related to the foreign retailers’ entry into their states, is seen as a barricade for the foreign investors.

Being concerned over the veto power of the States, many of the foreign retailers like Walmart, still not interested in the Indian Market. They, the world’s largest supermarket chain, still remain reluctant to enter the Indian Market.

Initiating more FDI in retail, UPA Government had allowed the foreign retailers to have more direct investment in the Indian market. As per the new plan the retailers can set up own shops in India, however with the consent of the respective state.

Walmart, being cautious about the Veto power of the States, remain reluctant to enter Indian Retail Market.

So long only 10 states and the Union Territories have permitted the foreign retailers while majority of the states including Tamil Nadu, Uttar Pradesh and West Bengal have rejected the entry of foreign retailers.

Walmart also is concerned over the mandatory 30% financing form the other small-scale enterprises instead of having mono-brand business. IKEA too had similar problems.

Recently executives of Walmart, along with US Government officials, has met Commerce & industry minister Mr. Anand Sharma; seeking clarifications on the issue. The US officials informed the government that the rules which make minimum $100 million investment mandatory for the foreign retailers.

They fear that the policy may get altered as the government changes and have conveyed their fear to the Indian government. Replying to their queries, Mr. Sharma informed that they can purchase goods from the states and there is no restriction for them.

Walmart was one of the first foreign retailers expected to enter India. A spokesperson of Bharti Walmart said that the group is really excited to enter India. The person added that the group has been studying Indian Market ever since the new FDI policy was announced in September.