A day after global retail giant Wal-Mart announced its entry into the Indian market through a tie-up with Bharti group, the government said on Tuesday it would examine whether 'permissible limits' with regard to foreign investments were adhered to.
"We will have a look (at) whether permissible limits have been adhered to," Commerce and Industry Minister Kamal Nath told reporters on the sidelines of the India Economic Summit.
While India has not allowed foreign direct investment in multi-brand retail format, foreign investment is permitted in wholesale trade as well as logistics and back-end support.
As per the arrangement between the two companies, Bharti would manage the front-end of the business while Wal-Mart would take care of the supply chain, logistics and other back-end operations.
Policy hurdles had earlier forced Wal-Mart to put its India plans on hold, but it has now settled for a collaborative venture.
Asked if Wal-Mart was making a backdoor entry into the burgeoning Indian retail market through its tie-up with Bharti, for which it is the first brush in the retail segment, Nath said, "We will see whether it as per rules and regulations."
Also, he said the government will see whether farmers would benefit due to the agreement and what impact it could have on local neighbourhood stores.
The minister said the government was keen to attract foreign investment in logistics and supply chain.
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