Walmart Reviewing India's Retail Sector

Walmart president and CEO Mike Duke was in India this week expounding on the benefits that await the country's retail sector if only it were open to foreign direct investment. Speaking at a meeting of the Federation of Indian Chambers of Commerce and Industry, Duke suggested that if Walmart were allowed to invest more fully in India it could help modernize the retail sector, raise the standard of living, improve food safety, elevate farmers' productivity, protect the environment, reduce inflation, help small businesses and enable the nation to realize its full social and economic promise.

Duke made reference to Walmart founder Sam Walton's comment: "If we work together, we'll lower the cost of living for everyone, we'll give the world an opportunity to see what it's like to save and have a better life." and offered some examples of how Walmart has delivered on that vision in India. For example, Duke talked about Walmart's direct-farm program in Punjab and Delhi and announced a new goal to purchase from 35,000 small and medium farmers by 2015. Duke said the company currently purchases from 600 small farmers.

"We will work with these farmers on crop management and we will provide more direct market access for their produce. We will train them to grow food more sustainably, using less water and optimizing the use of pesticides and fertilizers," Duke said. "By purchasing directly and helping these farmers operate more efficiently, we estimate that they will see a 20% increase in income."

The program is an example of the way Duke said Walmart can lift up the lives of Indian people because its efforts have a multiplier effect with one million workers involved in farming and agriculture production expected to benefit.

"We're confident that with these steps we can and we will make a difference for farmers and farm workers. And as we grow in India, we'll lift up the lives of even more people in cities and rural communities across the country," Duke said. Another key message shared with the business leaders was Walmart's effort to educate the nation's work force in the ways of modern retail. Two years ago the company opened a training center with its joint-venture partner Bharti and more recently opened a second facility in Delhi.

"So far more than 3,400 students have achieved a certification and more than 1,100 of those students have been placed in jobs," Duke said. "I'm pleased to announce today that we will be adding a third skills training center in Bangalore within the next couple of months." The goal is to certify more than 40,000 students over the next five years and place 15,000 of them in jobs.

The thing that is noteworthy is that India's business and social leaders have to be wondering whether Walmart is doing all of this stuff to simply sway opinion toward allowing 100% foreign direct investment or, as Duke implied, India is seeing a small sample of the potential that awaits if Walmart is allowed unbridled access to the market.

The company and the country have a long way to go to realize the aspirations outlined by Duke. Since Walmart announced its joint venture with Bharti three years ago, four cash-and-carry stores have been opened with a fifth due in the coming months and a total of 10 to 15 within the next two years.