MUMBAI, India — Wal-Mart Stores said Wednesday that it is splitting from its Indian business partner and cannot move forward with plans for its own retail stores in India because strict government regulations on sourcing from local small businesses make it impossible.
The move by the world's largest retailer is a blow to Wal-Mart's expansion plans in India as well as the country's attempts to attract foreign investment in the huge but underdeveloped retail sector. Wal-Mart already runs a wholesaling joint venture in India and will continue that business, buying out partner Bharti Enterprises.
Wal-Mart did not name any other Indian partner, which would be necessary to open its own retail outlets, and comments from its top Asia executive indicated that plans to open its consumer superstores are indefinitely on hold because of government regulations.
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