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This issue of FDI in retail once occasioned sharp exchanges between BJP and Congress when the NDA Government was in office. This happened on December 16, 2002.


priya-dasmunshiA leading Congress M.P., Shri Priya Ranjan Dasmunshi, referred to an Economic Times article which had written that on the issue of FDI in retail, the Planning Commission in its draft document of the Tenth Plan had affirmed that FDI was required in this sector, Dasmunshi said that through bureaucrats, “multinational retailers are continuously putting pressure on the Government to take this anti-national decision of allowing foreign direct investment in the retail trade.”


Dasmunshi added that Government had appointed a Group of Ministers to lay down the limits of FDI. This GOM had rejected the concept of FDI in retail trade. Later a Task Force of the Planning Commission on Employment also, he said, categorically advised against it on the ground that it would aversely affect employment.


 Dasmunshi said: Sir, the Commerce Minister is here. I request him to clarify the position and let it go on record.


Arun Shourie who was Minister of Commerce and Industry at the time immediately stood up to say: Sir, the existing policy since 1997, as you know, and the Hon. Member knows, is that foreign direct investment in retail trade is not permitted.


Dasmunshi: I said that the Tenth Plan document prepared by the Planning Commission has endorsed it while the Group of Ministers has rejected it.


Shri Arun Shourie : In any case, the Tenth Plan document is also coming up before the National Development Council. All the Chief Ministers including Congress Chief Ministers would have an occasion to comment on individual proposals. In that, there are trading activities for exports or for joint ventures, which are permitted in wholesale activities and so on but those are specialised things. If you would like me to read them, I can read them out but as far as retail trade in general is concerned, he is completely right that since 1997 that has been the Government’s policy. I understand, there were two companies which were given permission before 1997 in this regard but since then nobody has been given permission. We have checked that with the Reserve Bank also.


b-ramanB. Raman is a highly respected name in India’s intelligence circles. He was head of the country’s external intelligence agency, Research and Analysis Wing (RAW). He retired as Additional Secretary, Cabinet Secretariat, Government of India.


In a recent article written for the Outlook website, Raman has regretted how public confidence in the CBI has been rapidly going down. He has urged that a comprehensive enquiry into the functioning of this agency should be ordered and measures should be initiated to restore its image in the eyes of the people.


An interesting fact mentioned by Raman in his article that in the last week of December, 2010, the Chinese Government issued a White Paper on corruption in China, and how government has been dealing with it.

The former RAW Chief comments: “ Even in an authoritarian country like China, the Government has felt the need for convincing the public that it is aware of their concerns over corruption.


“Despite India being a democracy supposedly accountable to the people, the Government has shown a shocking lack of concern over public criticism of the CBI and over evidence of a general institutional decay which has permitted corruption to thrive.”


America’s biggest retailer today is Walmart. It has thousands of stores all around the world. The largest number is in the U.S. The second largest is in Mexico. According to a New York Times report, this has been achieved by the retail giant’s Mexico arm by “dishing out generous payouts to aid its mammoth growth.” Shortly after the Times published its investigation in April, 2012, Walmart confirmed that it had launched an investigation into the allegations of bribery at Walmart de Mexico.



gurumuOn the same Friday (September 14) Prime Minister Manmohan Singh rolled out the red carpet for Walmart, New York City, America’s largest, shut Walmart out.


Again ironically the very Friday the UPA government handed the FDI bouquet to Walmart and lobbyists assured that small retailers are safe, Atlanticcities, a web-newspaper from the stable of the famous Foreign Affairs magazine, carried a devastating headline news: ‘Radiating Death: How Walmart Displaces Nearby Small Businesses’.


Weeks ago, on June 30, over 10,000 people, shouting “Walmart = Poverty”, marched through Los Angeles, America’s richest city, against Walmart stores.


On June 1, hundreds protested in Washington DC against Walmart. “Say-No-To-Walmart” is an ongoing movement all over the United States.


– S. Gurumurthy

in- The New Indian Express

September 20, 2012


L.K. Advani

New Delhi

23 Sept, 2012

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  1. speakingtree8 Says:

    Points against FDI

    1)Just go to USA, Europe and find out how the big players totally destroyed local shops and lead to large scale employment loss…..Even Other Asian countries have to limit the presence of these players after small traders got displaced. Also creation of millions of jobs is myth as most of them are contractual and the plight of workers and their exploitation by these stores are well known.

    2) FDI in retail don’t bring anything new in terms of technology, product or market….It will just displace the existing players (small shopkeepers) from current market.

    3) The farmers will be at loss in a big way. The bargaining power of farmers will get reduced due to few buyers (just 1 or 2 superstore chains) and they will be at loss. Also if Foreign retailers procure directly, don’t expect them to pay higher prices than market prices…They are not here for charity.

  2. speakingtree8 Says:

    IF retail in FDI is so beneficial for farmers, Why USA government is giving massive subsidy to its farmers which is many times more than the subsidy given by Indian government ????? Does Indian government, who want to cut subsidy at every level, can provide such massive subsidy to Indian farmers???

    4) Also introduction of foreign players who have strong supply chain network and procure their product from china is disastrous to local industry. The local industry will be hit very badly (like American industry as 90% of Wall mart products are made in china) as they can’t compete with chinese government supported and subsidized (with low taxes, cheap power, flexible labor laws and low interest rates) chinese industry. This will lead to more job loss and revenue loss for India in Industrial sector.

    5) International retail players have no role in building roads or generating power. They are only required to create storage facility and cold chains. This could be done by Indian government

  3. speakingtree8 Says:

    6) India is trying very hard for years to have parity in service and product industry in regards to WTO rule…BUT US, Europe are not willing to implement theses free trade rules in IT industry…Why…Because they are intelligent and looks after the interest of their industry, wealth and people employment.

    7) It will bring money for short term but led to revenue loss from India on permanent basis.

    8) Indian players are very small and can’t compete with these big retail giants (remember demise of campa cola, gold spot etc. which are purchased by coke and pepsi to remove all competition and local industry). They need more time to grow and have scale to compete against.

    9) Fragmented market gives larger option to consumers. Consolidated markets make the consumer captive. Also Global retail giants will resort to predatory pricing to create monopoly/ oligopoly. This can result in essentials like food supplies, being controlled by foreign organization.

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