Wal-Mart teamed up with local Bharti Enterprises in joint venture that will be called Best Price Modern Wholesale.

Best Price will not be open to retail shoppers but will instead serve small stores, fruit and vegetable sellers, restaurants, hotels and other business outlets.

Because of India's strict foreign investment rules, no overseas chains are allowed in the retail sector -- except for single-brand outlets such as Nokia or Reebok -- to protect the country’s 15 million “mom-and-pop” stores.

Foreign businesses such as Wal-Mart can only be wholesalers and must partner with domestic companies to enter the retail market, valued at 400 billion dollars and forecast to grow rapidly in the coming years.

Wal-Mart hopes it can build a successful partnership with the mom-and-pop family stores -- which make up 95 percent of India's retail landscape – and eventually lessen opposition to overseas retailers.

"We're aiming to supply to mom-and-pop stores under one roof at outstanding prices," said Raj Jain, a 27-year business veteran who joined Wal-Mart as president of emerging markets in 2006 and spearheaded its entry into India.

Merchants who obtain their products from Wal-Mart will receive discounts of about two percent on commodities such as grains and up to 20 percent on big-ticket merchandise, he said in an interview.

Small retailers’ opposition to the entry of big foreign stores such as Wal-Mart has played a big part in the left-of-center government's refusal to open up the sector to international chains.

"We hope they (the government) will slowly open foreign direct investment in retailing so large investments can flow into the supply chain, improving the infrastructure," Jain said.

Food waste due to improper storage and transport, for example, "is 30 to 40 percent so modernization is critical," he said.

But Jain said Wal-Mart recognized change in India had to be gradual.

"There's only a certain pace at which you can move and it can't be faster than people want. It's not going to happen in a hurry."

Wal-Mart already has international operations in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua and Britain.

Of course not all of its foreign ventures have been successful. In 2006, the company exited Germany and South Korea due to tough competition and poor sales.