French retailer Carrefour is exiting Indian operations
French retailer Carrefour is exiting Indian operationsREUTERS

US retail giant Wal-Mart will take up three Indian stores from French group Carrefour, which earlier announced its exit from the country amid continuing regulatory issues.

India's Business Standard newspaper, citing sources, reported that Wal-Mart will replace Carrefour's wholesale stores in Delhi, Jaipur and Agra with its own.

A "source close to the development" told the newspaper that Wal-Mart had finalised a deal with the land owners that had long-term lease agreements with Carrefour.

Wal-Mart refused to comment on the report.

The US retail major earlier announced that it would expand its number of cash and carry or wholesale stores in India to 50 in the next four to five years.

The company currently operates 20 wholesales stores single-handedly in India, after breaking a retail joint venture with Bharti Enterprises.

The deal with Carrefour would allow Wal-Mart to open its first stores in Delhi and Jaipur. It already operates one store in Agra.

"Our planning team is diligently progressing on our growth strategy, as announced earlier, for opening an additional 50 cash and carry stores in the next four to five years in the country," Business Standard quoted as saying Rajneesh Kumar, vice-president of corporate affairs at Wal-Mart.

"Besides, based on the encouraging response to our B2B (business to business) e-commerce initiative (Hyderabad and Lucknow), we would soon start extending this virtual platform in our remaining stores, in a phased manner."

Meanwhile, Carrefour is going ahead with its India exit.

After entering India in 2010, Carrefour decided to shut down its operations in less than four years as the company found it difficult to comply with the country's tough sourcing norms.

In addition, it could not find a local partner. Foreign companies are allowed to take up to 51% stake in multi-brand retailing firms under India's FDI rules.

The company has only a small team left in India to conclude the commercial and regulatory transactions. It now has to sell its outlets in Bangalore and Meerut.

KPMG has been helping the French chain sell its assets and exit India.