Walmart will be benefited by the Goods and Services Tax (GST) which will be a win-win situation for all, the American retail giant’s top official in India said in Washington on Monday as the landmark tax reform measure is all set to be rolled out on July 1.
“For instance, in the medium to long term when it becomes one national unified market, you don’t need warehouse in every single state. That’s a big benefit in terms of economies of scale, how one can drive economies of scale,” Krish Iyer, president and CEO of Walmart India, told PTI in an interview.
“Eventually, if we are able to run the business at lower cost, we will pass it onto the consumers, and the prices of the central commodities can come down, so it’s a win-win for everyone, for the consumer, for the state, as well as for the business,” said Iyer, who was present in the meeting that Walmart CEO Douglas McMillion had with Prime Minister Narendra Modi on Sunday.
Walmart is eyeing a big space for itself in India and is all set to benefit in a big way, the company said.
“We’re appreciative of what the government is currently doing in terms of reforms, and we had no specific discretions. We are happy with the way the government is getting out various refunds.
“We were very appreciative of the GST, particularly the changes that will come into effect from first of July, and we believe that GST will be a game-changing reform, and will remove a lot of barriers which currently exist,” Iyer said.
During the course of the meeting with Modi, McMillion reiterated Walmart’s commitment to expand its operations and investment in India.
“We also talked about global sourcing that we do from the country and also the global technology centre that we have,” Iyer said.
The Walmart CEO also talked about the agenda on working with farmers regarding the company’s direct procurement programme and the economic empowerment of women entrepreneur.
Walmart has proposed to open 50 more Cash and Carry stores over the next four to five years.
“We have already built a pipeline of nearly 16 stores as we speak, and the work is in progress in terms of various stages of construction,” Iyer said.
Walmart believes that India has improved a lot in ease of doing business in the last three years, he said.
“I have been witness to various changes and efforts that the government has made in the ease of doing business. The result may not be visible on the ground as of today, but I know that it takes time, and the various concepts, various concept like e-governance, and the efforts to really root out corruption, these are highly commendable, so I can give a lot of instances of the very strategic focus of the government in driving growth and creating jobs,” he said.
Prime Minister Modi has done a lot of things to help the retail industry, Iyer said, adding that all these shows government’s intention to make retail a vibrant industry in the medium to long term.
“That is what is commendable, so it’s not just Walmart, I’m sure. Most of the retailers, also, within the country would echo the same sentiments, and would benefit from these reforms,” Iyer added.