The government today said Bharti group's tie-up with Wal-Mart for retail operations was in conformity with the existing foreign direct investment policy. "A joint venture company has been formed with equal partnership between Bharti Enterprises and Wal-Mart for setting up wholesale cash and carry operations...This arrangement is in conformity with the extant FDI policy," Minister of State for Industries Ashwani Kumar told Rajya Sabha in a written statement.

India bars FDI in multi-brand retail operations but allows 100% foreign investment in wholesale cash-and-carry operations. Kumar also said the government has not received any proposal from Wal-Mart for investment in retail trading. Bharti and U.S.-based Wal-Mart had earlier this month announced the joint venture for wholesale cash-and-carry and back-end supply chain management operations in India.

The two also have a technical arrangement, under which Bharti Retail will own and manage retail stores under a franchise agreement with Wal-Mart. Bharti Retail is a 100% subsidiary of Bharti Enterprises. Under wholesale cash-and-carry operations, a company supplies goods to bulk consumers at competitive prices.