India is WalMart's first choice to expand

While the government is still debating whether to allow 26% or 49% foreign direct investment (FDI) in retail, the world's largest corporation $288 billion Wal-Mart Stores Inc has declared India as its first choice for expansion.

Elaborating on the company's international expansion plans on Friday, chief executive of Wal-Mart Stores Inc H Lee Scott said he saw India ahead of all other markets, including Russia and Turkey. He also indicated that in markets where Wal-Mart was not present, it would like to enter a 'little bit early'.

"It's going to be a great retail market. When the time is right, we are going to do it," Mr Scott said in reference to the retail major's plans to enter India, according to Bloomberg. He was talking at a conference of retailers in Istanbul.

Though Wal-Mart does not have a retail presence in India, its Bangalore office outsourced over $300 million worth of goods directly and $800 worth through third-party suppliers in India in 2004. And it's hungry for more.

"With the large manufacturing base for India's growing domestic consumer market, Wal-Mart sees excellent opportunities for expanding its supplier base in India and is working to identify new categories. India's suppliers are innovative and supportive of trends in various departments and sectors. They are adopting key management principles and are responsive to our needs, flexible and generally easy to work with," says Wal-Mart's director, international corporate affairs Beth Keck.

Wal-Mart apart, several other players such as Carrefour, Ahold, Starbucks are also believed to have been actively doing the groundwork for entry into India after the government showed its willingness to open up the sector to FDI.

"Quite a few players are already scouting for partners. They have done their market research and surveys," PricewaterhouseCoopers executive director NV Sivakumar said but refused to name any particular retailer. Another industry expert said teams of several retail giants have been visiting India regularly to either meet their suppliers or to review real estate or take stock of the supply chain. "The number of global retailers showing interest in India are too many to mention," KSA Technopak's Harminder Sahni said.