India on Friday assured global retail giants Walmart and Metro that its reforms agenda is well on course and the decision to put on hold FDI in multi-brand retail is ‘just a pause’, forced by compulsions of coalition politics.
This assurance was given by India's Commerce and Industry Minister Anand Sharma when he met Walmart president Doug McMillon and Metro's board member Frans Muller on the sidelines of the World Economic Forum meeting here.
This is for the first time that senior management of the US and German retailers met any minister after Indian government suspended the controversial decision to open Foreign Direct Investment (FDI) in multi-brand retail on November 24.
Sharma said the decision to open 51 per cent FDI in multi-brand retail ‘could not be implemented because of the compulsions of coalition politics as also partisan opposition’.
"It is just a pause. The decision has only been put on a temporary halt... India growth story is intact and the government is committed to take forward the reform agenda," Sharma said.
He said while the government has restarted consultations taking on board concerns of agrarian states, only the bona fide objections would be taken into account.
A statement from India's Commerce Ministry quoted McMillon as saying that Walmart is committed to invest in Indian market as an when FDI in multi brand retail is allowed.
Walmart also expressed its willingness to abide by the proposed conditionalities to open the sector for FDI.
"If retail FDI happens, it would be good for the entire trade and the Indian government seems to be confident about that," Frans W. H. Muller, Member of the management board of German-based Metro Group said.
Walmart Executive Vice-President (Corporate Affairs) Leslie Dach said: "We are hopeful about the government allowing FDI in retail. India is a very big growth market for us. We do understand that things take some time in democracy. Even the US similar things do happen."
Dach wanted that there is an urgent need for India to move forward with reforms agenda. "We are hopeful that India will do so."
Sources said that the Walmart team conveyed to Sharma that they were committed to make investment in the back-end retail infrastructure.
Indian minister also met senior management functionaries from Volkswagen which informed him that the German automobile major has plans to invest Rs2,000 crore in their expansion projects in India.
Unilever Global Chief Operating Officer Harish Manwani also called on Sharma and discussed the company's plans for the Indian FMCG market.
Besides, Former US Ambassador to India Timothy J. Roemer said the US administration is a true believer in Indian economic growth story. "And we are hopeful that India would move forward with its reform agenda."
In the midst of the government handing over assurances to global CEOs, key Indian corporate honchos emphasised that the country has to speed up the pending reforms.
"The government should work fast on the reforms agenda. The world is looking at us," Kotak Mahindra Bank executive vice-chairman and Managing Director Uday Kotak said.
CII Director General Chandrajit Banerjee said: "People are looking at India. They are expecting that India should move forward on the reform agenda fast."