Cash and carry biz: Relaxing of FDI norms opposed

Industry bodies in Karnataka have taken an exception to the relaxation in norms in wholesale cash and carry segment from October 1 this year as it will impact the livelihood of local retailers.

“We have taken a strong exception to the relaxation of FDI norms in wholesale cash and carry from October 1, 2010,” Federation of Karnataka Chambers of Commerce and Industry said.

It also said the industry bodies had not been consulted before simplification of the rules.

Earlier, the Centre had simplified the rules in the wholesale cash and carry segment with request from stakeholders.

The industry body has also taken exception to the fact that there was no consultation with the associations. This move by industry associations come at a time when global retail majors such as Wal Mart, Metro and Carrefour are planning to increase their presence in India.

“The changes are in violation of the understanding that no changes which will hurt local retailers will be brought until the nationwide discussion on FDI in multi-brand retailing is processed and decision is arrived at,” the industry body said.

The industry body also asked the intention of the government regarding the issue.

FDI in retail has been facing the flak from retailers since 2001 who are opposing the 100 per cent FDI in wholesale cash and carry business. Also, there are allegations on wholesale cash and carry format for deviating the norms of Foreign Investment Promotion Board.

“Despite the objections it seems the government has gone a step ahead by relaxing norms for retail sales in wholesale cash and carry format,” FKCCI said.

While the debate to prevent FDI in multi-brand retailing was still going on, the rules for wholesale retailing should not have relaxed at this time.

The association,also, demanded to put this amendment on hold till further discussion.

“This amendment seems to be more pro MNC which will affect the Trade and Industry at large and create unemployment,” it added.