The Hindu: Walmart resumes US lobbying on FDI in India

The Hindu: Walmart resumes US lobbying on FDI in India
October 27, 2013

Global retail giant Walmart has resumed its lobbying with the US lawmakers on matters related to FDI in India and it spent $1.5 million on about 50 specific issues, including those related to Indian market during the last quarter.

“Discussions regarding Foreign Direct Investment in India” is one of the ten-odd specific issues in the area of trade that were carried out by registered lobbyists on behalf of Walmart during third quarter of 2013, according to its latest Lobbying Disclosure Form submitted to the U.S. Senate.

Overall, Walmart lobbyists discussed nearly 50 ‘specific issues’ with the US lawmakers during the quarter, resulting into total expenses of $1.5 million relating to lobbying activities for the reporting period, shows the 19-page disclosure report.

Walmart’s lobbying activities covered the Senate, House of Representatives, Department of State, US Trade Representatives, U.S. Agency for International Development and the Department of Labour, among others.

As per Congressional records, Walmart had halted its lobbying with the U.S. lawmakers and federal agencies on India-specific issues in the preceding quarter, after seeking their support for about five years to facilitate its entry into the high-growth Indian retail market.

However, such lobbying activities resumed during the last quarter — a period which also saw hectic parleys in India with regard to Walmart’s business activities in the country.

After months of discussions, Walmart earlier this month announced buyout of Bharti group’s 50 per cent stake in their wholesale retail business in India.

Walmart has also been requesting the Indian government to further relax norms for FDI in multi-brand retail business, where 51 per cent foreign equity was allowed last year despite opposition by various political parties.

Incidentally, a probe report on Walmart’s lobbying for entering India may soon be discussed by the Union Cabinet. The probe is said to have remained inconclusive as Walmart and others did not provide required information.

The Indian government had ordered the probe on Walmart’s lobbying late last year after a huge political outcry over the American retail giant having spent millions of dollars on its lobbying activities in the US for years on various issues, including on access to the Indian market and the relevant FDI norms.

Lobbying is legally permitted in the U.S., but the companies and their registered lobbyists are required to make detailed disclosures about their activities every quarter.

Walmart, on its part, has been maintaining that it has disclosed all its lobbying activities as per the US rules and it did not violate any Indian regulations in this regard.

There are no clear regulations on lobbying in India, although companies here also indulge in activities promoting their cause with the government and other agencies, either directly or through industry bodies and other groups.

As per the Congressional records, Walmart began lobbying in the U.S. on India-specific issues way back in 2008. Since then, the company has spent a total amount of $39.42 million (about Rs. 242 crore) on numerous lobbying issues, including those related to India.

Out of this, over $5 million have been spent so far in 2013. Walmart’s lobbying issues did not include India in the second quarter of this year, while the first quarter of 2012, as also all four quarters of 2009 also did not have any single lobbying issue related to India.

Walmart and many other overseas supermarket chains have been wanting to set shop for many years in India, which opened up this business for foreign players only last year.

Still, there are many restrictions, such as those on sourcing of products, that are keeping foreign multi-brand retailers away from the country.

Separately, Walmart was also facing a probe by the Enforcement Directorate here for alleged violation of FEMA (Foreign Exchange Management Act) norms, but is said to have been given clean chit on that front.

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