Walmart revealed in 2012 that it had lobbied amounting to $25 million since 2008 for market access in India. After the revelation, Walmart had to face immense criticism and resentment in India because lobbying was still a taboo and was considered a dirty game in India. Walmart was tagged to have bribed the Indian government and a commission was appointed to look into the matter of Wal-Mart lobbying in India. Wal-Mart maintained that the targeting had been unjust. Wal-Mart maintained that it had been using the funds for legitimate lobbying.
Karthik Ramanna and Vidhya Muthuram
Harvard Business Review (114023-PDF-ENG)
September 06, 2013
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Wal-Mart Lobbying in India? Case Answers
Executive Summary – Wal-Mart Lobbying in India?
Wal-Mart, established in 1962, was the world’s largest retailer with 10,000 retail outlets in 27 countries in 2013, serving 200 million customers a week and employing nearly 2.2 million individuals. Wal-Mart set up operations by JVs and acquisitions in Canada, Australia, the United Kingdom, Japan, and other nations. In 2012, Wal-Mart revealed that it had spent amounting to $25 million as it was lobbying for market access in India since 2008.
The retail sector in India accounted for 23.6% of India’s GDP, but it was not open to foreign investments until the liberalization of the economy in the early 1990s. India opened up some sectors for FDI, but retail was still not permitted. FDI policies were reformed, and hence Wal-Mart launched wholesale operations in India in 2007 in partnership with Bharti Enterprises. Ninety percent (90%) of the JV’s products were manufactured locally.
It extended its footprint in India and operated 20 stores throughout eight states by 2012. But after Wal-Mart revealed in 2012 that it had lobbied amounting to 25 million since 2008, Walmart had to face immense criticism and resentment in India because lobbying was still a taboo and was considered a dirty game in India.
Wal-Mart maintained that the targeting had been unjust. Wal-Mart maintained that it had been using the funds for legitimate lobbying.
Controversies faced by Wal-Mart
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