Wal-Mart's disclosure in the U.S. that it spent $25 million lobbying American lawmakers for help gaining access to foreign markets has triggered demands from Indian politicians for a government investigation.
Lobbying is considered illegal in India and is often equated with bribery.
The Wall Street Journal on Wednesday said India's government will appoint a retired judge to conduct an investigation.
Wal-Mart has denied that it did any lobbying in India.
In demanding a government investigation, upper house opposition BJP member M Venkaiah Naidu said:
"It is a question of our nation's sovereignty. It is a shameful act. We have to have a detailed discussion."
The Indian government earlier this year changed the law to allow foreign retailers to own up to 51 percent of local outlets.
Last month Wal-Mart's India joint venture suspended its chief financial officer and others during a growing global bribery investigation.
Wal-Mart said in November that its FCPA investigation that started in Mexico had expanded at least to Brazil, China, and India.
Wal-Mart's partner in India is Bharti Enterprises.