The American retail chain Walmart will be investing Rs. 900 cr to open 15 outlets catering to wholesalers in Maharashtra. Chief Minister of the State, Devendra Fadnavis and top officials of Walmart recently signed a MoU for opening these Cash & Carry stores. According to Additional Chief Secretary of Industries Department, Sunil Porwal, Cash & Carry stores will cater to wholesalers, retailers and hotels. They already have two stores in Aurangabad and Amravati respectively, and want to expand to other cities. A MoU has been signed to set up stations at Mumbai, Pune, Thane, Solapur, Nagpur and other places. Walmart India currently owns and operates 21 best price modern wholesale membership clubs across nine states, offering nearly 5,000 items. The company plans to open 49 more such outlets by 2020.
The deal is the first one after the implementation of Goods and Services Tax (GST). For retailers GST is considered a boon as it reduces the need for setting up warehouses in every State, now that taxes are standardised. This helps them in economies of scale as they can choose to set up bigger warehouses in fewer locations. Each store would be spread across 50,000 sq ft and will provide employment to nearly 50,000 people. In 2012-13, there was a lot of opposition to the foreign retail stores and Foreign Direct Investment in retail. At present, Indian laws do not permit full foreign direct investment in single brand retail due to which many global brands are operating in the cash and carry format, which serves only wholesalers.