By Malini Menon and Nandita Bose
NEW DELHI/MUMBAI, Dec 11 (Reuters) - India's government said
it was prepared to launch an inquiry into lobbying by Wal-Mart
Stores Inc., buckling under an opposition campaign to
discredit a flagship economic policy.
Opponents of reforms that allow foreign supermarkets to
trade in Asia's third largest economy renewed pressure on the
government after Wal-Mart disclosed that it had paid $25 million
over four years to lobby U.S. lawmakers to help gain access to
foreign markets, including India.
Wal-Mart has found itself entangled in a fight between Prime
Minister Manmohan Singh's fragile minority government and
political opponents determined to thwart supermarket reform
which, they say, will destroy the livelihoods of millions of
mom-and-pop store owners.
The dispute has thwarted the government's efforts to drive
more economic reforms through parliament before the winter
session ends on Dec. 20. Opposition parties have sought to
portray Singh's government as the pawn of powerful foreign
companies ahead of national elections due in 2014.
"This money was spent in India and this question arises as
to on what did they spent this money? To whom all have they
given this money?" said opposition lawmaker Yashwant Sinha,
chairman of parliament's finance committee and a former finance
Parliamentary Affairs Minister Kamal Nath said he would
announce steps towards an inquiry in parliament later on
Tuesday. But his office denied he had given a date for any
action, raising questions about whether the government would
indeed launch an investigation.
A senior member of the ruling Congress party even ruled out a
parliamentary or judicial inquiry, saying there was nothing to
Wal-Mart said allegations it had lobbied in India were
"The expenditures are a compilation of expenses associated
with staff, association dues, consultants, and contributions
spent in the United States," said a spokesman for the company's
local Bharti Walmart joint venture.
"On the U.S. side, I don't have any reason to believe that we
have a violation of U.S. law here. With regard to the Indian
side, I'll refer you to them," U.S. State Department spokeswoman
Victoria Nuland told reporters in Washington on Monday.
Bentonville, Arkansas-based Wal-Mart has been the most
active among foreign supermarket operators keen to push their
way into India's $450 billion retail market. Opponents fear the
entry of Wal-Mart and others will put millions of small
shopkeepers out of business.
The company is also being investigated by India's financial
crimes watchdog over whether it entered India's supermarket
sector before the country allowed foreign retailers in.