INTUC takes U-turn, hails FDI in retail

Till the other day, the Indian National Trade Union Congress (INTUC) had made no secret of its opposition to foreign direct investment in multi-brand retail. But the trade-union wing of the ruling Congress party at the Centre has now had a change of heart. At its working committee meeting on Tuesday, the INTUC threw its weight behind the UPA government in supporting FDI in the retail sector.

INTUC president G Sanjeeva Reddy, who is a Rajya Sabha MP from Andhra Pradesh, said FDI in retail “is nothing new” for Southeast Asia. “Even China has developed such a lot after bringing in FDI. (American retailer giant) Walmart’s network in China is biggest in the world,” he noted, speaking to Business Standard.

As for on Tuesday’s working committee meeting, the INTUC has decided not to position principally opposed to the union cabinet’s recent decision to permit FDI in retail — “as long as the government comes forward and gives assurance that it will protect the interests of small scale traders and hawkers”, said Reddy. Significantly, he is a member of the Congress Working Committee, the party’s highest decision-making body.

Only a fortnight ago had Reddy told this newspaper that his union vehemently opposed the government proposal to permit FDI in multi brand retail trade. Reddy had then said such a move was “bound to create unemployment and kill small traders”. The MNCs would take over the country’s retail sector, feared the leader of the INTUC, which has over three million members across all major sectors of the economy.

On Tuesday, Reddy distanced himself from his earlier stand. “In any case,” he said, “FDI will only be applicable to cities with one million population.” According to INTUC estimates, this would be about 53 cities.

The union head claimed that foreign investment, by itself, was not harmful to the country. “The policy decision of the government has taken care to give proper protection to small-scale traders,” he added.

Other Rajya Sabha MPs who are INTUC members include Pradip Bhattacharya, who is president of the union’s West Bengal unit and Rama Chandra Khuntia, his counterpart in Orissa.

Khuntia told Business Standard that the union had been discussing the issue of FDI for “quite some time” and had agreed to allow FDI in multi-brand retail.

Apart from these MPs, who are aligned to the trade union wing, two Congress MPs from Uttar Pradesh — Sanjay Singh and Praveen Singh Aron — have gone public with their dissent on the issue.