Several global retail chains—including Walmart, Metro and Carrefour—that were allowed to now sell only via B2B in India have instead been found to have repeatedly sold directly to consumers, in violation of foreign direct involvement (FDI) rules, according to a story in Cobrapost in India, as reported by The Indian Express.
“In an almost two-hour long documentary, persons alleged to be executives of these firms are seen to be permitting and promoting retail operations in their respective stores. According to the law, FDI in multi brand retail is currently not permitted, and these wholesalers have been mandated to adhere strictly to B2B operations,” the story said. “Cobrapost claims the store executives were willing to allow routine shoppers to buy things for personal consumption. They were allowed entry on the membership cards issued to a few businessmen to which the entire amount was billed. Journalists from the web portal claim to have visited 12 Best Price (Walmart) stores , seven Metro stores and four Carrefour stores across 15 different cities to confirm their findings.”
Other than direct punishments for flouting the call, these chains risk much more dire consequences. This report could antagonize Indian legislators and regulators, especially because multiple major chains were involved. Nothing angers government officials more than foreign businesses that agree to domestic restrictions and then disobey them. This could lead to more foreign retail restrictions, which could hurt the Indian revenues of all chains much more than any fine or other onetime penalty.