Traders hold nationwide stir today

With the stage set for foreign majors to enter the multi-brand retail space in India, various traders' associations in the country are up in arms over the development.

While the Confederation of All India Traders is organising nationwide protests tomorrow, others like Bhartiya Udyog Vyapar Mandal plan similar movements next month.

Last week, a Committee of Secretaries had cleared a proposal to allow 51 per cent FDI in multi-brand retail in the country.

During their protest on Tuesday, CIAT would issue an open memorandum to Prime Minister Manmohan Singh, urging him to defer the CoS recommendations.

The representatives of the association also plan to meet chief ministers of different states, Union Finance Minister Pranab Mukherjee, and Leaders of Opposition in the coming days.

BUVM would hold similar protests in Delhi on August 2 and in Uttar Pradesh on August 9.

According to CAIT Secretary General Pravin Khandelwal, the Indian retail sector is not unorganised but self-organised. No government since Independence had given due priority or attention to it, he told Business Standard.

Being the second-largest employment generator after agriculture, allowing foreign players would create mass unemployment, he said.

"If the sector needs to be upgraded, then why not provide opportunities to the domestic players to modernise themselves in terms of technology or in providing better service to customers," Khandelwal

argued.

He also called for framing the National Trade Policy to help domestic players beat global competition and provide tax benefits and ease the availability of funds.

The traders dismissed the rider on minimum foreign direct investment as a joke.

Chains like Walmart and Carrefour have deep pockets, and this rider is meaningless, according to Shyam Bihari Mishra, president, BUVM.

Khandelwal also said these big foreign chains have giant budgets, that would enable them to sustain losses for many years.

Dharmendra Kumar, director, India FDI Watch, argued that the Indian manufacturing sector should be protected.

But a rider on sourcing from the domestic market was not feasible, as 'local sourcing needs to be properly defined', Kumar said.

It was a grey area that needs to be tackled, he added.

Kumar also called the proposed rider of investing 50 per cent in back-end infrastructure an ineffective step, as it was not required in non-food retail.

Chief Economic Advisor Kaushik Basu had recently recommended opening of multi-brand retail in order to curb inflation. But traders opposed this, saying price inflation would not be contained through rolling out red carpets to foreign players, but by checking hoarding by retailers and transactions in the commodities exchange.

"Domestic retail chains backed by corporate houses had entered the market in 2005, yet the inflation graph only went up. Also, the government should study the actual benefits accrued to the farmers and consumers in these six years," said Khandelwal.