FDI in Retail

An embattled UPA government has hung the ‘Open’ sign for foreign retailers. The cabinet said OK for 51% FDI in multi-brand retail sector & 100% FDI in single brand. On one hand farmers will benefit from it but on the other hand small traders feel they will not be able to withstand the competition. Will India in general benefit from this step?

Who is afraid of FDI in retail?
Given the debate that's raging over opening the retail sector to foreign direct investment, we bring you the government's view, the opposition's objections and TOI's take on the issue. Government argument * Huge investments in the retail sector will see gainful employment opportunities in agro-processing, sorting, marketing, logistics management and front-end retail. * At least 10 million jobs will be created in the next three years in the retail sector. * FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen. * Foreign retail majors will ensure supply chain efficiencies. * Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce post-harvest losses. *This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted. * Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation. * A strong legal framework in the form of the Competition Commission is available to deal with any anticompetitive practices, including predatory pricing. * There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail. Thailand has experienced tremendous growth in the agro-processing industry. * In Indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers.

from setting up any business unless there are very good reasons to do so. International retail does not create additional markets. organized retail through Indian corporates is permissible. India in contrast will lose both manufacturing and services jobs. They are only required to create storage facilities and cold chains. This could be done by governments in India. Eventually. there will be a spurt in jobs. the jury is out on whether this is the case or not. China is predominantly a manufacturing economy. Times View In principle. * Jobs in the manufacturing sector will be lost because structured international retail makes purchases internationally and not from domestic sources. Small retail has virtually been wiped out in developed countries like the US and in Europe. it merely displaces existing markets. Allowing foreign players with deep pockets leads to consolidation. * Fragmented markets give larger options to consumers. It's the largest supplier to Wal-Mart and other international majors. So. South East Asian countries had to impose stringent zoning and licensing regulations to restrict growth of supermarkets after small retailers were getting displaced. This can result in essentials. Big retail chains are actually going to hire a lot of people.* In any case. Fears of small shopkeepers getting displaced are vastly exaggerated. International experience shows supermarkets invariably displace small retailers. This has been the experience of most countries which have allowed FDI in retail. in the short run. India has the highest shopping density in the world with 11 shops per 1. being controlled by foreign organizations. 95% of these are small shops run by self-employed people * Global retail giants will resort to predatory pricing to create monopoly/oligopoly. unless it can be shown that FDI in retail will do more harm than good for the economy.2 crore shops employing over 4 crore people. It has 1. Consolidated markets make the consumer captive. including food supplies. Frankly. both supermarket chains and neighbourhood pop-and-mom stores coexisted. will give home delivery? The local kirana. Opposition's argument * Move will lead to large-scale job losses.000 people. International retail players have no role in building roads or generating power. It's not going to be any different when FDI in retail is allowed. governments should not prevent anybody. When domestic majors were allowed to invest in retail. * Argument that only foreign players can create the supply chain for farm produce is bogus. there's likely to be a redistribution of jobs with some drying up (like that of middlemen) and some new ones sprouting up. Who. Experience of the last decade shows small retailers have flourished in harmony with large outlets. It obviously cannot say no to these chains opening stores in China when it is a global supplier to them. A major argument given by opponents of FDI in retail is that there will be major job losses. Indian or foreign. with different studies claiming different findings. Why would . * Comparison between India and China is misplaced. Hence. it should be allowed. after all.

the bulk of India's population? The idea of organised retail is to get quality stuff to buyers at reasonable prices. In China. where productivity is dismal and the pressure of population high. however. retailers employ technology. they deserve to fold. India's share is a paltry 6. it will boost the incomes of quite a few other Indians . on the outskirts of cities (to keep real estate costs low). making aloo tikkiburgers and offering free home delivery. unorganised and goes largely untaxed. experience. giving consumers a better deal. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn.000 farmers supplying fresh veggies and grains to it by 2015. The most important item in the debate is the impact that big investments and new technologies will make on one vital sector: food and groceries. how will they gobble up the local guy? Secondly. . it can't be anyone's case that farmers are getting a good deal right now. and can't intrude into the territory of local kiranas. That is no small gain. Let's not get dreamy about this unequal relationship. To begin with. Rivals like Haldiram's have not only held their own. McDonald's has had to adopt local ways. Steadily-growing farm incomes and productivity can revolutionise India. How about consumers. Despite its size and growth. it's very unlikely that global retail will ever become monopolies. raise health. It hopes to have a network of 35. and make growth truly inclusive. the entry of retail big boys is likely to hot up competition. FDI in retail can enrich 650 million Indians for inclusive growth The entire political opposition to allowing overseas investment in retail is focused on the assumed plight of traders and small merchants in India. who depend on farming for a living. If organised retail can eliminate the middlemen in the farm-to-fork chain. Stores like Wal-Mart or Tesco are by definition few. Mega retail chains need to keep price points low and attractive . education and environmental standards. If small businesses can't keep up. run lean inventories and minimise waste. storage and logistics to cut overhead costs.anyone shun them? If anything.5%.about 650 million. To do that. but prospered at the same time. It can rise without mass extinction of traders. So. Food and grocery make up 67% of India's retail sales. but only 2% of this market is organised. This is necessary to break the monopoly of the mandi bosses who now suppress farmers' prices to drive up the incomes of traders. for example. These are largely products from the farm. both in prices and choices. despite the profusion of malls. Companies like Walmart know this and it is no surprise that the US giant has set itself a target of increasing farm incomes by 20% each year from the time it enters the market. The fact is that farmers barely subsist while middlemen take the cream. organised retail comprises around 25% of total retail. India's retail sector is messy. shows that indigenous businesses can hold their own against foreign brands. who outnumber sellers by many multiples? And what about farmers.that's the USP of their business. The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak.

The company has sent out a mail asking them to avoid any media interaction related to policy issues.47PM IST. has issued clear gag orders to its employees. "There is a lot of media interest about us." the Carrefour India spokesperson said. India's largest homegrown retailer. The French company.30 Nov. Employees need prior approval to talk. to its employees on Monday asks them to 'adhere to external communication policy'. which is looking to set up front-end retail stores in India for many years now. the company chose to re-assert this policy on the day the Opposition stalled Parliament over the government's decision. has also decided to keep shut on the issue. AFP FDI in retail: Protest at Carrefour store in Jaipur over retail reform JAIPUR: Hundreds of angry protesters rallied at a wholesale Carrefour store in Jaipur to demonstrate against reforms opening up the retail sector to foreign firms." the mail said. French retailer Carrefour. the 50:50 cash and carry JV between the world's biggest retailer and Bharti Enterprises. While it is standard corporate practice for executives to seek permission before talking to the media. . FDI in India: Retailers issue gag orders to staff NEW DELHI: Transnational and Indian retailers have instructed their employees in the country to keep a low-profile amid growing political uproar over the government's decision to throw open the retail sector to foreign players. An e-mail sent by Bharti-Walmart. 2011. FDI in retail: Retailers issue gag orders to staff 29 Nov. 03. operates two wholesale stores in India. We are watching and waiting with the rest of the world." said the Tesco India spokeswoman on Tuesday. "We will not comment on a political subject. But as the political din has grown louder over the last few days. "The current environment is not conducive to comment on the issue. 2011. "At the moment. as an official notification from the government on the new policy was pending.'' says the internal e-mail. retail firms have decided to opt for discretion.28AM IST. police said on Tuesday. UK-based retailer Tesco operates in the wholesale segment in India through a franchise arrangement with Tata group-led Star Bazaar stores. which entered India in 2010. we are still withholding our comment until the government of India release more detail. Walmart and Future Group were two of the many companies that applauded the cabinet's decision to allow foreign retailers to set up stores in the country last Thursday. 02. including FDI norms in retail and its own expansion plans. Future Group.

A fire was lit outside the store as protesters chanted slogans demanding a withdrawal of the reforms. said. 2011.Local police officers said that protesters from trade bodies and the main opposition Bharatiya Janata Party (BJP) had entered the French-owned store. ." 29 Nov.24AM IST. However. BJP leader in Rajasthan state. whatever decision government will take. "They tried to tear some banners but they could not do so and we controlled the situation in time. Referring to his meeting with them earlier in the day. PTI FDI in retail: Pranab Mukherjee to meet PM. they burnt an effigy of Prime Minister (Manmohan Singh). Mukherjee said Opposition leaders have suggested a roll-back of the decision and a discussion in Parliament on the issue under an adjournment motion.14PM IST. One of their suggestion is you roll-back." Arun Chaturvedi. said.. Mukherjee said. another suggestion has come that this should be discussed under an adjournment motion. 04. "I informed them (Opposition leaders) that I will talk to the leadership -. which critics say will wipe out many small. They didn't enter in the store and nothing has been burnt. "They have given various suggestions. And thereafter." 30 Nov. 2011." he said. "There was no damage. you will come to know. "It was a peaceful protest. but the new reforms would enable them to sell directly to customers via large supermarkets. 02. which have attracted widespread opposition from many lawmakers including parties within the ruling Congress coalition. "Our protest was against the government's decision to allow foreign direct investment in the retail sector." he told reporters here. Sonia on impasse NEW DELHI: Finance Minister Pranab Mukherjee will talk to Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi and thereafter the government will decide on how to resolve the impasse in Parliament over the decision to allow FDI in multi-brand retail.Prime Minister and Sonia Gandhi. family-run stores. The BJP has led opposition to government reforms to the retail sector announced last week. but a spokesman for the company denied the reports." a Carrefour spokesman. Everybody is safe.. "The demonstrators managed to barge inside the store despite security." police sub-inspector Bajrang Singh said about Monday's protest in Jaipur. who declined to be named. Foreign companies have been allowed to operate wholesale stores in India. a popular tourist destination in the western state of Rajasthan.

Majority items to be sold by international retailers are going to be sourced from cheaper manufacturing economies like China. you seek counter-concession for concessions you grant. It is good to be a reformist. we can expect global retailers to source domestically. if international retail majors are permitted the consequences will be adverse. both the US and the European Union have become more protectionists. Is international retail going to give additional jobs. shoes. The fall in manufacturing sector jobs is likely. Their object is that large international chain must control the food supply chain and the distribution of other items of daily utility in one of the world's largest markets. or is it only going to displace existing jobs? If purchasing power increases with the expansion of Indian economy. leading to an adverse setback to our already challenged manufacturing sector. at this stage. Increasingly. Traditionally. low-cost utilities. In any trade negotiations. it will reflect in the co-existence of structured organised domestic retail and small retail. Self-employment continues to be the largest single source of bread earning. However. Changes which may end up hurting domestic interests are really counterreforms. says Arun Jaitley The United States of America and the European Union have been demanders seeking that India permit Foreign Direct Investment in its retail trade. India has obviously resisted the demand till date. The time for allowing FDI in retail sector in India has still not come. rather than creating additional jobs. International retailers with deeper pockets will displace existing jobs in the retail sector. The pace at which domestic retail is growing is modest and it is able to coexist with small retail.FDI in retail: Improve core sector & trade facilitation first. Without extracting any concession back. In the absence of these reforms. The latest NSSO survey shows a loss in employment. Domestic retailers source domestically. Clothes. toiletries and other items of daily use are not likely to bear Indian signature. we need to improve infrastructure. gifting to their retailers the right to control the distribution network in India. a lot of us find ourselves on the side of reforms but every change is not a reform. Once these reforms bring down the cost of our manufacturing goods. both small and organised retails have grown. international retailers will be selling the products of low-cost economies. so as to enable us develop into low-cost manufacturing economy. In recent years. International retailers operate on the principle of buying internationally at the cheapest cost. India needs manufacturing sector reforms in the first instance. we have taken a unilateral decision. The first consequence will be an adverse impact on domestic manufacturing. A significant investment is being made year after year. The character of the Indian economy is service-sector oriented. Agriculture and retail are the largest job providers in India. For this. . competitive interest rates and trade facilitation. which accounts for over one-sixth of world's population.

Those arguing that the retail decision would erase the impression of policy paralysis in the government. the three leaders did not utter a word at Thursday's Cabinet meeting. along with the SP and BSP. A consolidated market restricts the consumer choices. It can even lead to international retailers with deeper pockets to first sell at low prices. the government should have opted for a gradual and conciliatory approach. Singh's public attack on the policy is significant as it comes in the wake of attempts by Congress' political rivals to exploit the insecurities of the Bania community as well as farmers in the coming polls. but the hour-long meeting failed to resolve the logjam in both Houses of Parliament. Contrary to the claims in a section of the media about their speaking against the move. Mukherjee had met Opposition leaders over the issue. Vayalar Ravi and Mukul Wasnik not to rebut reports that they had opposed the move in the Cabinet." a senior minister. . eliminate competition and then exploit the consumers. who did not wish to be identified. These were held up for a decade. demanded that the decision should be revoked. "The opening up of the retail sector and labour reform are the two most contentious issues. a large section of party MPs and even ministers have been questioning the timing of the move. Rather than pushing ahead with FDI in retail. 02. Both Houses were first adjourned as soon as they assembled at 1100 hours and then again after they reassembled at noon as members from the BJP.39AM IST. 30 Nov. structured retail is hardly likely to serve consumer interests. Even UPA allies TMC and DMK. The consequences of predatory pricing can always be felt. Left and other parties trooped into the Well. 2011. ET Bureau Sanjay Singh calls retail decision anti-poor NEW DELHI: The disquiet in Congress over the Cabinet decision to allow FDI in retail once again came out in the open when party MP from pollbound Uttar Pradesh Sanjay Singh branded the move as "antipoor". Although the government leadership is sticking to its decision. which lend outside support to the government. The anxiety to be seen among the sceptics seems to be prompting ministers like Veerappa Moily. A section of the Congress party said much of the embarrassment could have been averted had the government leadership timed the decision after the Parliament session. Thus. said. Opposition parties led by the BJP and Left stuck to their stand in Parliament today and demanded a roll-back of the Cabinet decision to allow 51 per cent FDI in multi-brand retail. if the number of establishments is reduced and consumer options are eliminated. TRS. had forced the Cabinet to accept the proposal for allowing 51% FDI in multi-brand trading.A fragmented market is always in consumer interest.

Buyers are expected to benefit the most from the increased competition in the retail industry in terms of prices and quality. Eleven states have said they will not allow supermarket chains to set up shop. executive director at PWC. The hullabaloo over easing foreign investment norms in multi-brand retail is centered on the notional loss to a fraction of traders in the country and the consumer has been passed over. The government on Thursday allowed 51% FDI in multi-brand retail." said Akash Gupt. SMRITI SETHSMRITI SETH. 2011. A comparison of potential gainers and losers in the government's move to open up the country's $450 billion (over 20 lakh crore) retail segment to foreign direct investment (FDI) reveals that while a section of 40 million traders are likely to be affected by competition from organised modern retail. 29 Nov. TNN FDI in retail: BJP promised FDI in 2004. according to several estimates. Despite the apparent benefit to consumers. the parliament was adjourned because of the uproar. 09. In contrast. The opposition could restrict access for foreign retailers such as Walmart and Tesco to only about 25 big cities. On Monday. "Competition will push prices down and improve quality of products. Some experts say FDI debate underplays the importance of consumers in an economy. It also raised FDI in single brand to 100%. thereby benefiting the entire country. 2011.03AM IST. In big cities. As per the 2011 census. They will also be the biggest gainers from FDI in retail. the number of people working in the retail sector is likely to be lot less. the numbers of people connected with retailing in the country is about 40 million." Gupt said. apparently. 07. consumers in the 53 most populated cities of the country add up to over 122 million. about 122 million consumers stand to benefit from it. but restricted it to cities with population in excess of one million. "We must not forget that consumers are the most important part of our economy today. some political parties and state chief ministers have come out strongly against the government move.07AM IST. made U-turn in 2009 .ET Bureau FDI in retail to make consumers king? 122 mn consumers set to gain NEW DELHI: The consumer is not king.29 Nov.

14AM IST. deciding to oppose FDI in retail and to protect tiny and small vendors. 26% FDI in retailing will be allowed. In Bihar. However. had seven years ago promised to open up the sector to foreign competition. it will not allow foreign investment in the retail sector.. "The BJP understands the critical importance of retail trade in the context of employment and services provided by them. Bihar deputy chief minister and senior BJP leader Sushil Modi said American embassy officials met him in Patna recently asking him to open the doors for Walmart and Tesco. It then went on to promise safeguards for small and tiny vendors besides loans at 4% and a pension scheme for them. The 2004 manifesto came around the time the NDA government commissioned a report from research agency ICRIER on the pros and cons of letting in foreign retailers. the party reversed its stand before the 2009 elections. Modi said he told the American diplomats that Bihar did not require major retail chains. What led to the change of stance is not known. says Sushil Modi NEW DELHI: Americans had started lobbying for FDI in retail much before the Union Cabinet cleared the proposal. by the time ICRIER submitted its report. Disclosing this on the sidelines of the state finance ministers' meet on GST here on Monday. 29 Nov. In the meanwhile. "Organized retail trade on the international pattern will be promoted as a new engine of growth for trade and employment through appropriate legal and fiscal measures. it refrained from permitting global chains to set up multi-brand stores in India mainly due to pressure from the Left parties which were part of UPA-1. and thus favours a dominant role for the unincorporated sector in retail trade.NEW DELHI: The main opposition party BJP. However. 09. While the Congress-led government restricted itself to allowing FDI in single-brand retail. the retail sector is the largest employer of nearly four crore people. which is protesting strongly against the UPA government's move to allow foreign direct investment in retail.. a party spokesman denied that the opposition party had ever promised to permit FDI in retail. Walmart is not required. NDA had lost power to UPA." he said when asked about the issue of FDI in retail. BJP also changed its position and categorically said in its 2009 manifesto that it will not allow foreign investment in the sector." BJP's manifesto for the 2004 general elections had said in the section on trade and investment. When contacted." Modi tweeted. with Gujarat chief minister Narendra Modi stating on Monday that he was aligned with the leadership's decision to oppose FDI in multi-brand retail. After agriculture." the manifesto said. "US embassy officials had met me in Patna. Sourcing of Indian products by foreign retail chains will be encouraged. Towards this end. TNN FDI in retail: US lobbying started before Cabinet nod. "My stand is the same as that of my party BJP and which is in the interest of the nation. It is sticking to that position. . 2011.

FDI in retail: Pantaloon Retail. Modi's statement is likely to give more firepower to the opposition attack on UPA on the issue of FDI. Independent experts and analysts are worried that any rollback of the decision to open organised multi-brand retail to foreign investors will impact market sentiments and severely damaging India's image for foreign investors. According to reports. Haryana has said the matter needs thorough discussion before the state takes any decision. the opposition reiterated that it will not allow parliament to function till the government withdraws its decision. said this was not part of the agenda of the empowered group of state FMs discussing the Goods and Services Tax (GST). with opposition parties blaming the government for the unilateral decision. Gujarat FM Saurabhbhai Patel concurred with Modi and said his government's stand was the same as that of the central leadership. Among other Congress-ruled states." he said. however. after all party meet. "Bihar government has taken a stand. called by Finance Minister Pranab Mukherjee ended without a breakthrough." Modi said. put up a brave face in view of the mounting attack." he said. . however. He said Bihar had already conveyed its stand on the FDI issue and so had the BJP." Modi said. the Left. The meeting at the parliament annexe was attended by opposition parties like Bharatiya Janata Party (BJP). V2 Retail Ltd. "Policy in multi-brand retail holds the potential of transforming rural economy and unlocking supply chain efficiencies in the agri-business. while Kerala has taken a divergent view to the Cabinet decision. Parliament was adjourned on Monday over the issue. West Bengal FM Amit Mitra said Trinamool Congress was opposed to FDI in retail. Shoppers Stop crack in trade NEW DELHI: Major retail stocks such as Trent Ltd. Koutons. The government. on FDI in multi brand retail. Delhi FM A K Walia said he had not yet discussed the matter with the chief minister and only the CM would be in a position to comment on it. Bahujan Samaj Party (BSP) and Samajwadi Party as well as the Congress and its allies. AIADMK. "We have no evidence to support that it will be beneficial for small businessmen.While FMs from Tamil Nadu and West Bengal toed their CM's line of opposing FDI in retail. We are of the opinion that organisations like Walmart. Trinamool Congress and DMK. "We are opposed to the idea and my stand is the same as that of the party. He. some FMs from Congress-ruled states steered away from the controversy. Shoppers Stop Ltd and Pantaloon Retail Ltd slipped 2-4% on Tuesday. Tesco are not required at this stage as it will hamper small shop owners and farmers. Commerce minister Anand Sharma called a press conference on Monday to say the decision was taken after consultation with all stakeholders.

"From the perspective of an overseas investor who has been intimated that the cabinet has taken a decision.15 and a high of Rs 21. fund manager with Angel Broking. "We do not want the logjam to continue.35.9% lower at Rs 352.m. says Praful Patel With UPA constituents Trinamool Congress and DMK opposing the move to allow FDI in retail.65 and a high of Rs 223." Kanimozhi." said P Phani Shekhar. there is a need for talks and discussion among the allies. If there are any divergent views.While nobody expects the reform to yield large investments.7% lower at Rs 215.31PM IST.20 29 Nov. Trent Ltd was trading 2. Deloitte India. The stock has hit a low of Rs 991 and a high of Rs 1015.95. Shoppers Stop Ltd was trading 3.. he said "It is the PM's prerogative.3% lower at Rs 1001. most experts see this as a big sentiment booster. ..0 billion over the next five years. PTI FDI in retail: FDI decision is mature and collective. "In a coalition government. "It was aimed at renewed hope among the larger investor community that the government is alive and kicking. At 11:43 a. But I do not think there are no talks at all among the allies. Talks and discussion keep happening. Patel said. any kind of roll back would not cast a very good impression on the country. The stock has hit a low of Rs 209. 2011.25.5-$3. Koutons Retail India Ltd was trading 4% lower at Rs 21.. It was to showcase that. The stock has hit a low of Rs 347. government is trying to find out a solution." Asked about the possibilities of DMK MP Kanimozhi's induction in the Cabinet.15. On Trinamool's claim that allies were not taken into confidence before deciding on major issues." Patel said.95. partner." Heavy Industries and Public Enterprises Minister Praful Patel told reporters outside Parliament House. was yesterday granted bail by the High Court.35 and a high of Rs 364. The stock has hit a low of Rs 20. "We are very much part of the decision and it was a collective and mature decision on the FDI. sending out the large message to investors that the government is capable of taking politically difficult decisions. 03. shares of Pantaloon Retail Ltd were trading 3." said Anil Talreja. The NCP leader also favoured an early resolution of the stand-off between the government and the Opposition in Parliament.. the NCP today came out in defence of the government saying it was a "mature and collective" decision. an accused in the 2G case. All have given their views in the all-party meeting. Ratings agency CRISIL estimates FDI inflow of $2. which is small amount in the context of overall FDI inflows of $ 160 billion in India over the past five years. I should not be commenting on cabinet induction.

the Opposition is hopeful that a sense of the House would go against the Cabinet decision.opposing FDI in retail at the allparty meeting. However. DMK. A governance charter prepared by NDA managers in 2004 had promised 26% FDI in retail sector. besides creating employment in rural India. "There is no question of altering the language of the resolution. The party is demanding a rollback of the Cabinet decision to allow 51% FDI in multibrand retail. says Sushma Swaraj NEW DELHI: BJP on Tuesday said the content of its adjournment motion on retail was nonnegotiable. 2011. . he said. The Vajpayee Cabinet. 02. The Cabinet note prepared by then commerce minister Murasoli Maran of DMK. headed by critics of Manmohan Singh government's FDI policy. had formed a sub-committee under the then finance minister Yashwant Sinha to deliberate the issue. Incidentally.Sushma Swaraj and Arun Jaitley . ET Bureau FDI in retail: Won’t alter adjournment motion on retail FDI.59AM IST. The NDA government had favoured opening up of various sectors in the economy to FDI." Swaraj said. with the government agreeing to accept the motion." Swaraj said. "We are not on the negotiating table. 30 Nov. This had ended the government-Opposition standoff on the issue.Asked whether he supports "no work no pay" for MPs in the backdrop of continuing disruptions in Parliament. With Congress allies like the Trinamool. it is the same argument that the UPA government has propounded to defend its decision to allow FDI into retail.said at a press conference after an allparty meeting failed to evolve a consensus on the issue. "It is more important that parliament should function. The Maran draft had not made any distinction between singlebrand and multi-brand trading. IUML and outside supporters . agreed to modify the language of its adjournment motion on black money.SP and BSP ." the 2004 document had said. the Opposition was seeking a withdrawal of the decision. "Organised retail trade on the international pattern will be promoted as a new engine of growth for trade and employment through appropriate legal and fiscal measures. BJP made it clear that as far as the adjournment motion on FDI in retail was concerned. which vetted the note." leaders of Opposition in Lok Sabha and Rajya Sabha . which too now opposes retail FDI. had mooted 100% foreign equity in retail in 2002. last week. Sourcing or Indian products by foreign retail chains will be encouraged. argued that foreign participation in the sector would improve the country's foreign investment outlook. 02. 2011. "Their views should translate into votes. ET Bureau NDA govt wanted 100% retail FDI in 2002 NEW DELHI: The erstwhile NDA government. BJP had." 30 Nov. 26% FDI in retailing will be allowed.30AM IST.

Employees need prior approval to talk.36AM IST. UK-based retailer Tesco operates in the wholesale segment in India through a franchise arrangement with Tata group-led Star Bazaar stores. 2011. she said "then the government has the majority on its side to go ahead with it". retail firms have decided to opt for discretion. The French company. Swaraj claimed the NDA constituent would back the motion if there was a vote in Parliament." the mail said. French retailer Carrefour. including FDI norms in retail and its own expansion plans. "We will not comment on a political subject. But as the political din has grown louder over the last few days. FDI in India: Retailers issue gag orders to staff NEW DELHI: Transnational and Indian retailers have instructed their employees in the country to keep a low-profile amid growing political uproar over the government's decision to throw open the retail sector to foreign players. "At the moment. 2011. 03. has also decided to keep shut on the issue. which is looking to set up front-end retail stores in India for many years now. the company chose to re-assert this policy on the day the Opposition stalled Parliament over the government's decision. We are watching and waiting with the rest of the world. we are still withholding our comment until the government of India release more detail. 30 Nov. An e-mail sent by Bharti-Walmart. ET Bureau ." the Carrefour India spokesperson said.On the stand of the Shiromani Akali Dal (SAD). has issued clear gag orders to its employees. Walmart and Future Group were two of the many companies that applauded the cabinet's decision to allow foreign retailers to set up stores in the country last Thursday. While it is standard corporate practice for executives to seek permission before talking to the media. "There is a lot of media interest about us. The company has sent out a mail asking them to avoid any media interaction related to policy issues. Future Group. 30 Nov. 06. "The current environment is not conducive to comment on the issue. India's largest homegrown retailer. Asked what if the motion was defeated. which entered India in 2010." said the Tesco India spokeswoman on Tuesday. operates two wholesale stores in India.'' says the internal e-mail. which had written to commerce minister Anand Sharma welcoming foreign direct investment in retail. as an official notification from the government on the new policy was pending.28AM IST. the 50:50 cash and carry JV between the world's biggest retailer and Bharti Enterprises. to its employees on Monday asks them to 'adhere to external communication policy'.

storage and logistics to cut overhead costs. raise health. It can rise without mass extinction of traders.5%. making aloo tikkiburgers and offering free home delivery. India's retail sector is messy.FDI in retail can enrich 650 million Indians for inclusive growth The entire political opposition to allowing overseas investment in retail is focused on the assumed plight of traders and small merchants in India. Food and grocery make up 67% of India's retail sales. however. despite the profusion of malls. run lean inventories and minimise waste. McDonald's has had to adopt local ways. it will boost the incomes of quite a few other Indians . experience. These are largely products from the farm. education and environmental standards. It has planned to press for an adjournment motion at the all-party meeting called by the government on Tuesday to allow for a debate which could embarrass the government by bringing out the thin support for letting in global giants like Walmart and Tesco. Companies like Walmart know this and it is no surprise that the US giant has set itself a target of increasing farm incomes by 20% each year from the time it enters the market. for example. Apart from arguing that the entry of foreign retailers would hurt domestic business. The opposition. the bulk of India's population? The idea of organised retail is to get quality stuff to buyers at reasonable prices. the opposition is also upset that no effort was made to forge a consensus on such a far-reaching reform measure. where productivity is dismal and the pressure of population high. who depend on farming for a living. organised retail comprises around 25% of total retail. but only 2% of this market is organised. retailers employ technology. This is necessary to break the monopoly of the mandi bosses who now suppress farmers' prices to drive up the incomes of traders. If small businesses can't keep up. The most important item in the debate is the impact that big investments and new technologies will make on one vital sector: food and groceries. That is no small gain. To do that. but was still caught in a bind as the opposition insisted on rollback of the controversial decision to allow 51% FDI in the multi-brand retail sector. encouraged by support from Trinamool Congress. It hopes to have a network of 35. they deserve to fold. and make growth truly inclusive. shows that indigenous businesses can hold their own against foreign brands. Despite its size and growth. How about consumers. forced adjournment of both Houses as it asked the government to reverse the decision. Steadily-growing farm incomes and productivity can revolutionise India. unorganised and goes largely untaxed. FDI in Retail: Sonia Gandhi nudges government to set 30% quota for desi small and micro enterprises NEW DELHI: An embattled government on Monday heeded Congress president Sonia Gandhi's "advice" to clarify that the 30% sourcing norm for foreign retailers was meant exclusively for Indian small and micro enterprises.about 650 million.000 farmers supplying fresh veggies and grains to it by 2015. who outnumber sellers by many multiples? And what about farmers. Rivals like Haldiram's have not only held their own. If organised retail can eliminate the middlemen in the farm-to-fork chain. In China. India's share is a paltry 6. but prospered at the same time. .

A commerce ministry note on Friday had said that 30% sourcing from micro and small enterprises "could be done from anywhere in the world and was not India-specific" . The note undercut the government's argument that the entry of foreign biggies will boost Indian business and help with job creation. An advertisement taken out by the commerce ministry as part of its outreach failed to clear the doubts. and surprised even Union Cabinet members. leading the Congress president to intervene. Nitish Kumar. but failed to break the logjam in Parliament. excise and taxation minister in Congress-ruled Haryana. The clarification came as a respite for Congressmen. On Monday afternoon. The Congress chief intervened decisively on Sunday evening to minimize any political damage by getting the government to clarify that the norm requiring foreign retailers to source 30% of their products from micro and small entities was meant only for Indian businesses. the commerce ministry issued a clarification to underline that the 30% norm was designed exclusively for Indian micro and small industry having capital investment of not more than . On Monday afternoon. A note issued by the commerce ministry on Friday had said that 30% sourcing from micro and small enterprises "could be done from anywhere in the world and was not India-specific".Government sources ruled out a reversal of the decision. Mamata Banerjee. However. that too on an issue which has annoyed the traders and can expose the government to insinuations that it had capitulated to foreign capital.TNN FDI: We'll burn Walmart stores. An advertisement taken out by the commerce ministry as part of its outreach failed to clear the doubts. Sidhartha & Surojit Gupta.says Mulayam Singh Yadav NEW DELHI: Congress chief Sonia Gandhi intervened on Sunday evening to minimize any political damage by getting the government to clarify that the norm requiring foreign retailers to source 30% of their products from micro and small entities was meant only for Indian businesses. Kerala PCC chief Ramesh Chennithala shot off a letter to Prime Minister Manmohan Singh demanding withdrawal of the decision while Kiran Chaudhary. The note undercut the government's argument that the entry of foreign biggies will boost Indian business and help with job creation. Even as the government sought to reach out to non-UPA parties with commerce minister Sharma writing to chief ministers. The words "anywhere in the world" was dropped. and surprised even members of the Union Cabinet who had thought that the 30% clause catered to Indian businesses alone. 09. 2011. the commerce ministry issued a clarification to underline that the 30% norm was designed exclusively for Indian micro and small industry having capital investment of not more than $1 million (around Rs 5 crore). J Jayalalitha and Naveen Patnaik.12AM IST. "Our stand is that we will burn any such shop in the state and we will not allow it. said the entry of foreign retailers would hurt domestic traders 29 Nov. leading the Congress president to intervene. SP leader Mulayam Singh Yadav repeated the threat of BJP leader Uma Bharati to set Walmart stores on fire if they came up in UP. The government was resigned to Trinamool persisting with its protest. they were also wary of defying the majority opinion in Parliament. including Mayawati." he said. it was grappling with reservations and indifference in its own ranks.

. Continuing disruptions will make it difficult for the government to get crucial legislations cleared. Kerala PCC chief Ramesh Chennithala shot off a letter to the PM demanding withdrawal of the decision while Kiran Chaudhary. The words "anywhere in the world" was dropped. With Parliament stalled and with the ranks of dissenters swelling. but failed to break the logjam in Parliament. the risk of government appearing stuck in pause mode has grown. Even as the government sought to reach out to non-UPA parties with commerce minister Sharma writing to chief ministers. The misgivings were pronounced because of the fear of adverse fallout of the decision on Congress's prospects in the coming polls in UP and Punjab .$1 million (Rs 5 crore). said the entry of foreign retailers would hurt domestic traders. But they also agreed the government will find it difficult to change course since it will defeat the very purpose of the high-risk decision: to showcase government's new zeal to get on with governance. That calculation appears to have gone wrong. Nitish Kumar. Delhi finance minister A K Walia refrained from defending the decision. More people in the government and Congress on Monday acknowledged that the timing of the controversial decision was "politically wrong" . Mamata Banerjee. excise and taxation minister in Congressruled Haryana. Commerce minister Sharma argued that allowing FDI in retail will lead to job creation and boost the country's farm and logistics sectors. it was grappling with indifference in its own ranks. At a meeting of state finance ministers here to discuss the rollout of goods and services tax. It remains a mystery as to how the 30% sourcing from scale sector from anywhere in the world crept into the commerce ministry note. The worry was articulated at Thursday's meeting of the Union Cabinet which decided to open the doors for foreign retailers. including Mayawati." he said. it was brushed aside by reformsfriendly ministers on the ground that a show of purposefulness was necessary to counter the perception of policy paralysis. The clarification came as a respite for Congressmen. SP leader Mulayam Singh Yadav repeated the threat of BJP leader Uma Bharati to set Walmart stores on fire if they came up in UP. Sources also expressed surprise at the fact that the minister's statement to Parliament did not mention that 30% of sourcing from micro and small enterprises could be from anywhere in the world and not India specific. However. J Jayalalithaa and Naveen Patnaik . "Our stand is that we will burn any such shop in the state and we will not allow it. The government was resigned to Trinamool persisting with its protest.

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