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September, 2006 Pragati Maidan, New Delhi, India |
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Wal- Mart Asked To Keep Off Retail Trading Biz
Indian arm to handle product sourcing and quality control
US retail giant Wal- Mart has been allowed to set up a subsidiary in India but the government has stipulated that the Indian arm should not tread into retail trading. While clearing the company`s proposal, the government has imposed the `stipulation` to ensure that Wal- Mart`s investment does not result in a controversy. The world`s largest retailer is investing in India through its Singapore arm, WMGS Singapore Pte Ltd.
The interesting aspect is that Wal- Mart did not seek permission for retail trading, official sources said. While clearing FDI proposals, the government has asked a number of companies also to stay off the retail sector, they added. This includes proposals from Scojo Foundations Inc of the US, Dover of Switzerland and Eisai of Japan.
The government could be acting cautious due to the recent controversy over liberlaisation of FDI. In case of Wal- Mart, the government has provided clearance for a 100%, subsidiary with an investment of $ 450000. The Indian arm would handle product sourcing and quality control activities for the Wal- Mart group.
Date: 09-Nov-2004
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