People's Democracy

Protests Greet Wal-Mart In India

Prasenjit Bose

SEVERAL mass organisations including AIDWA, AIKS, CITU, DYFI and SFI along with activists of the India FDI Watch held a militant protest demonstration in Delhi on February 22, 2007 against the visit of Wal-Mart officials to India to sign the Bharti-Wal-Mart deal. Protestors marched towards Udyog Bhawan, the office of the minister of commerce and industry. Effigies of commerce minister Kamal Nath and senior Wal-Mart official visiting India, Michael Duke, were burnt amidst enthusiastic sloganeering: “Wal-Mart Go Back”. The protestors were arrested by the police. Similar protest actions were also organised in Bangalore and Mumbai.

The recent deal struck between Wal-Mart and Sunil Mittal’s Bharti Enterprises is in effect a backdoor entry of FDI in retail trade in India. While FDI in retail trade is not permissible under the existing policy on foreign investment in India, the franchisee agreement with Bharti Enterprises will allow Wal-Mart to circumvent existing policy regulations and gain a foothold in the Indian market. 

Wal-Mart is the biggest monopoly retailer in the world which is infamous for its pathetic record of violating labour laws, union-busting, displacing small retailers and exploiting small producers of manufactured and agricultural commodities. Its entry into India, which would invariably be followed by the other multinational retailers like TESCO and Carrefour, would monopolise the retail market in India in their hands causing harmful effects to all sections of the people. It would cause large scale displacement of small retailers and squeezing of domestic manufacturers and farmers. Expansion of the Wal-Mart chains has caused massive closure of small stores and pauperisation of poor communities even in the United States. In the context of huge unemployment existing within the country, such employment displacing FDI is the last thing that the Indian economy needs at the moment. In fact what is urgently required is a strong regulatory framework for the domestic organised retail sector like the Reliance Retail, which is expanding at a rapid pace. 

The UPA government had earlier allowed FDI in Single Brand Retail as well as FDI in Warehousing and Wholesale Trade. These steps by the government were all meant to eventually pave the way for MNCs like Wal-Mart to make an entry into the retail sector. Wal-Mart has been lobbying hard to change the FDI policy regime to facilitate their entry into India for quite some time. The UPA government, while allowing FDI in single brand retail, has not been able to allow the multinational multi-brand retailers to operate in India so far because of strong resistance from the Left parties, the trade unions, trader's organisations and other sections of the people. Therefore a roundabout way of getting them into India has been devised through this apparent joint venture. This is similar to the manner in which FDI was allowed into the sensitive telecom sector; first through joint ventures with minority foreign equity ownership and then increasing the FDI cap to facilitate majority foreign ownership.

United resistance of different sections of people would have to be built up in the coming days in order to prevent FDI in retail trade in general and Wal-Mart’s entry into India in particular.