December 12, 2012 10:17 am

India to probe Walmart’s lobbying activities

India’s Congress-led government has bowed to opposition pressure and is appointing a retired judge to investigate the lobbying activities of Walmart, the US retailer, as the company pushed to enter India’s retail market.

The probe has been prompted by political uproar over the recent routine disclosure by Walmart to the US Senate that, since 2008, it has spent about $25m on lobbying US government officials, as it sought improved access to markets around the world, including India.

Members of the Hindu nationalist Bharatiya Janata Party, and leftist parties – which are staunchly opposed to New Delhi’s recent decision to permit foreign retailers to set up shop in India – have tried to equate Walmart’s US lobbying with bribery, even though the disclosure filing only referred to lobbying activities in the US.

The judicial inquiry is intended to defuse the controversy, as India’s government seeks to attract much-needed foreign direct investment to revive its slowing economy. Opposition lawmakers have disrupted parliament for the past two days over the issue.

“We’ll make this a time-bound inquiry so that as fast as possible, the house is informed of its results,” Kamal Nath, the minister for parliamentary affairs, told the legislature on Wednesday.

Walmart, already under investigation in India over whether it violated the ban on foreign direct investment in retail, has repeatedly denied any wrongdoing, saying the report to the US Senate was a record of expenses spent on lobbying exclusively in the US, as required by US law.

“The allegation that a routine US lobbying disclosure form reflects improper conduct in India is false,” the company said in a statement on Wednesday. “This disclosure has nothing to do with political or governmental contacts with India government officials. It shows that our business interest in India was discussed with US government officials – along with 50 or more other topics during a three-month period.”

The furore over Walmart has triggered a wider debate on lobbying in India, where the activity is totally unregulated, takes place mostly behind closed doors, without public scrutiny, and is thus widely viewed as illegitimate – and sleazy.

“We are in denial about what constitutes lobbying,” said Satvik Varma, a New Delhi-based attorney and commentator. “The Indian mentality perceives that any time a pressure group pushes for something, there must have been some kind of quid pro quo or they wouldn’t have been heard.”

In recent days, several Indian newspapers have called for the government to confront the reality of corporate lobbying in domestic policy making – and corporate support for political parties – by making it transparent.

“Conducted out in the open, yet within the restraint of law, lobbying and investments in party war chests can be seen as part of the bargaining mechanism on which democracy runs,” the Indian Express newspaper wrote in an editorial. “Growing concern about the power of money in the polity can be allayed by transparently declaring where it comes from, how it is applied, and by whom.”

The Hindustan Times urged the government to adopt new regulations, modelled on the US Lobbying Disclosure Act, which it said would “remove the stigma associated with the word, and eliminate opaqueness in dealings with government”. 

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