NUSA DUA, Indonesia, Oct 6 (Reuters) - Wal-Mart Stores Inc's retail plans with India partner Bharti Enterprises are"not tenable" and both sides are looking for the best way tomove forward, an executive with the U.S. retailer told Reuters.
Wal-Mart was expected to make a decision on its Indianretail plans later this month and Bharti will accordingly decideif those plans match its overall retail ambitions.
"We created a franchise in retail with Bharti in the hopesthat there could be a potential freeing up (of foreign directinvestment) that would allow it to potentially be the base ofthe business. But frankly, the FDI has passed," said Wal-MartAsia Chief Executive Scott Price on the sidelines of the APECconference in Bali, Indonesia
"That means the existing franchise to Bharti is not tenableas the base. What we are talking about with Bharti is what we dowith that business."
Wal-Mart has an equal joint venture with Bharti under whichit runs its Best Price Modern Wholesale Stores in India and theU.S. retailer last year had called Bharti its "natural partner"to open its retail stores in the country.
In July, Reuters reported Bharti was looking to exit itsjoint venture with Wal-Mart.
India permitted foreign retailers to own 51 percent of theirIndian operations in September 2012, but ambiguity around rulesgoverning the policy has ensured no foreign retailer has so farapplied to enter the country.
"I don't see how any foreign retailer can comply and quitehonestly no domestic retailer is complying either," Price said.
Despite the uncertainty over the retail business, Price saidthat the U.S. retailer was not planning on leaving India and wasactually hoping to expand in the wholesale business.
"We are committed to India and we are not thinking ofleaving India anytime soon," he said.
- Bharti Enterprises