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Violation of FDI policy: HC issues notice to Bharti Walmart

Walmart entered in a joint venture with Bharti Enterprises in 2007 for carrying out cash and carry wholesale trade in India.

New Delhi: The Delhi High Court Wednesday issued fresh notices to Bharti Walmart Private Limited and Bharti Retail Limited on a plea for a probe against the firms for allegedly carrying out retail trading in multi-brand sector in violation of India's existing FDI policy.

A bench headed by Acting Chief Justice A K Sikri issued notices to the private firms as no one appeared on behalf of them in pursuance of notices issued against them on July 11.

The court, which had also sought a response from the Centre, has now posted the matter for hearing on September 26.

Earlier, the court had issued notices on the PIL filed by scientist and environmental activist Vandana Shiva.

The PIL alleged Bharti Walmart was illegally carrying out multi brand retail trade despite being permitted only to carry out wholesale cash and carry trade here.

Cash and carry is a form of trade in which goods are sold from a wholesale warehouse and customers settle the invoice on the spot in cash and carry the goods away themselves.

The PIL also alleged that many established Indian firms are acting as "front" for foreign firms to give their offshore partners a "majority control and economic interest" in retail sector here.

"This instant case seeks to expose how many established Indian companies are actually fronting for foreign trading companies that have partnered with them for setting up companies in India for the purpose of carrying on trade, so as to give the foreign partner majority control and economic interest in the Indian retail sector, thereby circumventing the FDI prohibition of multi-product trading in the retail sector," it alleged.

The retail giants are depriving Indian small traders of their "solitary source of livelihood", the petition alleged, adding that the activities of foreign companies "adversely affecting the multi brand retailing scenario" here and causing problems to lakhs of people in organised and un-organised sector.

Earlier, protests had prevented Walmart's entry into retail sector here, but, in 2007, it did get a "backdoor entry" for whole sale through a joint-venture with Bharti, the PIL said, adding that the stores have been opened up "by the names of Easyday and Best Price Modern Wholesale."

The petition, referring to a response received under the RTI, said the Department of Industrial Policy and Promotion has not granted any license to Bharti nor Walmart nor any other company to set up Easy Day stores in India.

"Union of India permitted Foreign Direct Investment only in the cash and carry wholesale sector in India, without implementing appropriate checks to ensure that such companies are not able to intrude the Multi Brand retail sector," it said.

Walmart entered in a joint venture with Bharti Enterprises in 2007 for carrying out cash and carry wholesale trade in India.


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