US multinational retailer Walmart has delayed its expansion plans in India that should have seen its first store open by September 2014, the Chicago Tribune reports.
Walmart had announced in September 2012 that it would open its first outlet in India within two years, after it successfully spearheaded efforts to open the market to foreign investors.
However, company sources have reportedly said that the retailer is unlikely to apply for its first store licence prior to March 2015. Following government approval, it would then require a further 12 to 18 months to open an outlet.
These delays mean that Indian consumers will not be shopping in a Walmart store before 2016.
Bharti Enterprises, Walmart’s local partner in an existing wholesale business, has been reported to be rethinking the two companies’ joint venture given the sizeable investment and only distant prospects for returns.
A Bharti spokesperson has denied these claims, which were also dubbed “speculation” by Walmart.
This development follows the departure of Raj Jain from his position at Walmart, who had been in charge of their Indian expansion, on 26 June.
These also come against a backdrop of an ongoing investigation into Walmart’s alleged bribery allegations, uncertain rules regarding foreign investment in the retailer sector and national elections in May 2014 that could see any decisions reversed.
With a population of 1.2bn and a retail trade worth $500bn, the majority of which is conducted in family-run local stores, India is potentially lucrative for global retailers. However, none have applied to enter because of the regulatory uncertainty.
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