People's Democracy

Do Not Allow FDI in Retail Trade

The following is the text of the letter addressed to the prime minister on the reported moves to revive the decision to allow FDI in multi-brand retail trade. The signatories to the letter are: Mulayam Singh Yadav, president of the Samajwadi Party, Prakash Karat, general secretary of the CPI(M), S Sudhakar Reddy, general secretary of the CPI, Danish Ali, general secretary of the JD(S), Debabrata Biswas, general secretary of the AIFB and Abani Roy, secretary of the RSP. The letter was delivered at the PM’s office on July 21.

Dear Manmohan Singhji,

Reports are appearing that the government of India is going to revive the decision to allow FDI in multi-brand retail trade. This decision was suspended earlier due to widespread opposition in the country.

The Indian retail sector is the second largest employer in the country after agriculture. It employs over four crore people. Most of them are small unorganised or self-employed retailers. The entry of MNC supermarket and hypermarket chains would cause severe displacement of these small and unorganised shopkeepers and traders. The entry of the giant Wal-Mart supermarket chain would have a disastrous impact. According to one estimate, a Wal-Mart supermarket in India would displace over 1,300 small retail stores and render around 3,900 persons jobless.

In a situation when employment growth has slowed down according to the National Sample Survey data of 2009-10, the entry of foreign supermarkets would further aggravate the employment situation.

We urge the government not to open up the retail trade to FDI any further. Political parties across the spectrum are opposed to this move. Many state governments have also stated their opposition.

In the absence of a wide ranging consensus, we request you not to proceed with this decision.