The alleged circumventing of foreign direct investment (FDI) regulations by e-commerce firm Flipkart Online Services and retail giant Bharti Walmart will now be probed by the Enforcement Directorate (ED).
Commerce & Industry Minister Anand Sharma said on Monday that the Reserve Bank of India (RBI) referred matters related to the alleged violation of FDI regulations by Flipkart and Walmart to the (ED).
High real estate costs is the largest challenge to deal with in the retail business foray in India, Bharti Walmart managing director & chief executive Raj Jain said.
Mr. Jain said that low price retailers like Bharti Walmart would not be able to offer great prices to customers due to very high rentals.
The Delhi High Court has directed the Centre government, Bharti Walmart Private Limited and Bharti Retail Limited to explain the violation of the country's Foreign Direct Investment policy.
The order came after a plea urged for an investigation into the retail trading by the company in multi-brand sector in the country, which is allegedly in violation of the FDI norms. The notices were issued by the bench of acting Chief Justice AK Sikri and Justice Anil Kuma.
In a move under the government tweaked the FDI rules for the country, players like Bharti Wal-Mart are expected to gain on the same.
It is to be mentioned here that the government recently allowed retailers to sell various good sources by the respective companies from the foreign investment funded wholesale venture rather than the earlier condition where the good could only be used for internal use.
The cash-and-carry group Bharti-Walmart is keenly is looking forward policy modifications in the multi-brand retail domain and articulated expects that it might be a large player once the FDI is permitted.
According to Bharti-Walmart Managing Director and CEO Raj Jain if the rule of the nation modifications they can open hundreds of stores, however this might be doable only if FDI is permitted.
Bharti-Walmart is a 50:50 cash and carry joint venture between Bharti Enterprises and WalMart, handling BestPrice Modern Wholesale stores in North India.
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