Walmart Wants the U.S. Government to Muscle It Into India

Walmart (WMT) is looking for places to put 500 more stores overseas this year. In India, it faces a roadblock, as it's illegal for foreign companies to open their own multi-line retail stores. But Walmart would like to plop some of its stores down in the country, so the retail behemoth is calling in an even bigger gun in an attempt to change Indian law -- the U.S. government.

Now, the U.S. government is hot to increase trade and correct our massive trade imbalance. President Barack Obama recently announced a major export initiative aimed at increasing the number of companies that export goods and services. Government agencies including the Department of Commerce and Department of Agriculture routinely arrange trade missions and introduce American companies to foreign buyers. The initiative has allocated billions in new funding to encourage trade. But asking Uncle Sam to muscle India into changing its laws so you can invade their shores? That seems to be crossing a line. Is that really what our lawmakers should be spending their time on? Bullying India to change its laws on retailing to let Walmart could damage our country's relationship with India. It's unclear why we should be risking that as a nation -- given that we're urgently trying to rebuild our international reputation these days -- just so Walmart can pave more great swaths of land and put up more stores in a country that's had a cultural tradition of keeping out foreign retailers.

One of the main points of government export programs is to help companies that otherwise would lack the resources to operate in foreign markets. But Walmart has spent $11 million on lobbying issues related to India, its public disclosures show.

Yes, it may well take government-to-government level talks to get India to change its foreign direct-investment laws. This worked, eventually, in Japan. But with everything else on America's global plate right now, this just isn't a good time for our federal trade experts to be trying this maneuver.

So far, Walmart's had to be content with doing a little wholesaling in India the past three years, operating through a joint venture with an Indian company. They already have plans to roll out more wholesale outlets. The company also sells its supply-chain expertise, highly valuable in a country that's still mostly mom-and-pop stores supplied by a network of inefficient middlemen and small vendors.

Walmart's acting like a big, whiny kid who wants the biggest bully in the school to come fight its battles. This is a $400 billion company with substantial clout of its own.

Our national export agencies are a little busy just now trying to teach about two million small businesses how to start exporting their goods and services. If Walmart can't figure out how to make further inroads in India on their own beyond this point, they should leave the government out of it and look elsewhere to drive their international expansion.

Photo via Flickr user galaygobi