Global retail giant Walmart and local trading partner Bharti Enterprises are at the centre of a legal case alleging the pair are in breach of India’s rules regarding foreign direct investment (FDI) in multi-brand retail.
According to reports in local media, prominent Indian philosopher and environmental activist Vandana Shiva has lodged the case against the companies with the Delhi High Court claiming their joint venture Bharti Walmart is operating in the multi-brand retail sector.
The lawsuit alleges that Bharti Walmart is indirectly running Bharti Enterprises’ Easyday neighbourhood supermarkets.
Current rules only allow foreign companies to invest in wholesale operations and not in multi-brand retail.
Foreign investment in multi-brand retail is a contentious issue in India where independently owned stores account for the vast majority of retail sales each year. It is widely believed allowing FDI in multi-brand retail will heavily impact the viability of independent retail operations.
In formal documents to the court the lawsuit stated it seeks to expose the extent to which established Indian companies are fronting for foreign retailers to enable them to trade outside government regulations prohibiting FDI in multi-brand retail.
