News: Bharti's joint venture with Wal-Mart may get delayed

(DNA 20/02/2007) Mumbai - On the very day Bharti Enterprises unveiled its retail plans for the front-end, it transpires that its proposed joint venture with Wal-Mart Inc may not happen immediately. According to industry sources, while Wal-Mart chief Michael Duke is still scheduled to fly into India this Friday (February 23), he is unlikely to ink the much-awaited pact with Bharti for a cash and carry wholesale, logistics and supply chain businesses just yet.

Duke is expected to be here for just about 24 hours and has already lined up meetings with commerce and industry minister Kamal Nath, besides officials in the Planning Commission. So, a packed schedule could be one reason for him and his high-profile team to shy away from committing themselves to the joint venture right now.

When contacted, a Wal-Mart India spokesperson merely said, “Our business arrangements with Bharti for wholesale cash and carry, logistics and supply chain are still being discussed. We look forward to partnering with them to build backward linkages with farmers and suppliers through a robust and efficient supply chain

But retail industry experts point out that several aspects of the partnership between Wal-Mart and Bharti may need further discussions. A major issue could be the timelag, after which each partner may want to go alone in India, with sources pointing out that Wal-Mart may like to break away as soon as the government allows FDI in retail.

Then, other aspects of a partnership such as branding of the front-end stores as well as the wholesale business, the pricing strategy etc may also need in-depth discussions before things are written down in black and white. The government’s recent flip-flop on retail FDI may also have compelled Wal-Mart to push back the actual JV just a wee bit.