FDI move will ruin Indian retail trade: CPI-M
New Delhi: The government's policy notification on FDI is "the single biggest step" that will destroy the livelihood of those engaged in India's retail trade, the CPI-M said on Friday.
"Notwithstanding the widespread opposition to FDI in multi-brand retail trade, the government has gone ahead with the notification (Thursday night)," the Communist Party of India-Marxist said.
It said the rules announced by the government for FDI in multi-brand were designed to serve the interests of MNCs like Wal-Mart, TESCO and Carrefour.
"The investment floor of $100 million (Rs.550 crore) is insignificant for the giant retailers like Wal-Mart which are multi-billion companies," it said.
"The restriction that foreign retail outlets should be in cities with over 10 lakh population is also irrelevant because these are precisely the urban centres which the MNCs want to access as they are the most lucrative segment of the market.
"Furthermore, the rules provide that in states/union territories which do not have cities having a population of more than 10 lakh, foreign retail outlets may be set up in cities of their choice. Thus foreign supermarkets can be set up in all parts of India and in a wider range of urban centres.
"The condition for making at least 50 percent of the investment in 'backend' infrastructure is being cited to argue that this would lead to more cold chains and other logistics, benefiting the farmers.
"International experience has, however, shown that procurement by MNC retailers do not benefit the small farmers. Over time, they receive depressed prices and find it difficult to meet the arbitrary quality standards."
The CPI-M said the government was bent upon promoting FDI in retail at the cost of domestic interests.
"By this policy announcement, the Manmohan Singh government has taken the single biggest step of destroying the livelihood of the largest number of people engaged in retail trade in India."