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Attention Wal-Mart investors… India is still opening for business

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Back in November 2011, India announced plans to allow foreign companies such as Wal-Mart ( WMT , quote ) to invest up to 51% in "multi-brand retailers." Those plans are currently on hold, but India's Commerce and Industry Minister Anand Sharma says not to worry: this is "just a pause."

Sharma met with Wal-Mart President Doug McMillon at the World Economic Forum on January 27.

India is heavily protectionist, and has long placed sharp limits on foreign investment. However, it is also desperate for new money to juice up its stock market and its economy. Growth has been slowing down, and the closed-end fund for India ( IFN , quote ) is down 22% from a year ago.

The decision to open up to foreign investment was suspended after the Trinamool Congress threatened to withdraw its support from the coalition government. Opponents of the retailing plan argued that foreign merchants would hurt small shopkeepers.

Wal-Mart is no stranger to disrupting local retailers. However, the company is also famous for introducing much-needed efficiency to supply chains. Proponents of the investment plan have argued that foreign supermarkets would help farmers who must currently sell their produce to an oligarchy of local wholesalers.

If the plan goes through, Wal-Mart won't be the only company getting involved. Carrefour ( CRERY , quote ) and Tesco PLC ( TSCDY , quote ) are interested, not to mention investment firms like The Blackstone Group ( BX , quote ) and Kohlberg Kravis Roberts ( KKR , quote ).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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