New Delhi, November 28
A day after global retail giant Wal-Mart announced its entry into the Indian market through a tieup with Bharti Group, the government said today it would examine whether "permissible limits" with regard to foreign investments were adhered to.
"We will have a look (at) whether permissible limits have been adhered to," Commerce and Industry Minister Kamal Nath told reporters on the sidelines of the India Economic Summit.
Earlier, the Left parties strongly opposed the backdoor entry of Wal-Mart, and urged the UPA government to “intervene” and “prevent” the entry of the US-based retail giant.
Asking the Manmohan Singh government to intervene on the issue, the Left parties, which provides the crucial outside support to the Congress-led coalition, threatened to launch a nationwide stir on the issue. Party MPs raised the issue during zero hour in the Lok Sabha and said this agreement was not permissible under the existing policy on foreign investments in India.
“FDI in retail trade is not permissible under the existing policy on foreign investment in India. The Wal-Mart’s franchisee agreement with Bharti Enterprises is an attempt to circumvent existing policy regulations to gain a foothold in the Indian market,” the CPM Politburo said.
The CPI said, “This is a move, which will allow MNCs and domestic big business houses to monopolise our retail trade sector, depriving millions of our people of their jobs and livelihood and exploiting the cheap labour of the poorer section.”
The Left parties had given a note to the UPA government opposing FDI in retail trade sector giving reasons for it. The discussions between the UPA and the Left remains inconclusive on this issue.
In the meantime, the Manmohan Singh government went ahead to allow the single brand retail sector. Now, in the name of a joint venture, Wal-Mart is allowed to enter the retail sector through backdoor, it added.
The CPM said its opposition to the entry of giant MNCs in retail trade is because it would cause massive displacement of unorganised retailers across the country, besides squeezing 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 massive 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, which is expanding at a rapid rate.
It said the party had earlier expressed its opposition to the policy announcement made by the UPA government, allowing 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.
