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Walmart faces illegal investment accusations in India

Marketplace Contributor Oct 19, 2012

Retail giant Wal-Mart is under fire in India for allegedly investing in a chain of Indian supermarkets despite a ban on foreign direct investment in that sector.

The accusation, leveled by a lawmaker representing the southern state of Kerala, follows a decision by the Indian government to open the wholesale retail sector to foreign investment. However, the plan does not include supermarkets. Wal-Mart denies the allegation, saying it respects Indian law. Though an inquiry is underway, no formal investigation has been launched.

All of this comes as the pace of economic growth in India continues to cool off, highlighting tensions among local businesses, foreign firms, and the Indian goverment.

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