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The alliance is expected to be for cash and carry business
in India. Reliance does not appear to be keen on partnering for front-end
business.Currently, front-end retail in India with a foreign ally could
be done on franchise model, as no FDI is permitted under policy guidelines
for multi-brand retail in the country.
DLF, Parsvnath, HDFC and the Wadias are said to be front
runners in the race for alliance for front-end retail. In fact, unlike
Bharti Wal-Mart alliance, Carrefour may end up with entering into several
franchise arrangements for front-end retail in India, according to the
report.
Through the alliance with Carrefour, Reliance would like
to strengthen its back-end in India and set up retail operations in other
emerging countries.
Carrefour is said to be looking out for a partner in India with a large
landbank and ability to manage political and bureaucratic environment,
with commitment to retail. Reliance seems to be the best such option in
India.
While the detail of the possible joint venture may take
some time to emerge, it might follow the Bharti's model of alliance with
Wal-Mart of the USA.
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