Consumer bodies for tough riders on FDI in retail

Some consumer associations today supported the government's decision to allow FDI in multi-brand retail but wanted tough riders to protect interests of small shop-owners and manufacturers.

"We are in support of the decision but some more riders are required...," Consumer Coordination Council Chairman Amrit Lal Saha said after attending a meeting convened by the Department of Industrial Policy and Promotion (DIPP) here.

In its bid to achieve a consensus on the politically sensitive issue, the DIPP has re-launched consultation with stakeholders including small industries, traders and farmers.

The government was forced to put on hold the Cabinet decision of November 24 to open FDI in multi-brand retail under intense pressure from the opposition parties and its own ally.

"There should be a gradual entry of the global retailers," Saha said. He expressed apprehensions that the global retail chains may resort to monopolistic pricing once they establish a foothold in the Indian market.

Pavan Kumar, Managing Director of Corporate Professionals, echoed similar views and wanted protection of kirana shops and street vendors.

"What will happen to the 'thelewalas' selling vegetables ...India is a different country, we cannot think only for multi-national companies," Kumar said.

In the consultation meeting, about 30 members from different consumer associations were present, besides government officials.

The decision to allow FDI in multi-brand retail had imposed some conditions on the foreign retailers. These included a minimum investment of $100 million, of which half should be in the back-end infrastructure like cold chains, processing and packaging.

The retailers would also have to source at least 30% of manufactured and processed products from small-scale units.