FDI in retail will lead to huge displacement of workers: Report

Published: 23rd August 2012 10:43 AM  |   Last Updated: 23rd August 2012 10:43 AM   |  A+A-

The government admitted on Wednesday that it had received a report from a global trade union umbrella body, warning that foreign investment in multi-brand retail would lead to largescale displacement and poor treatment of Indian workers.

In a written reply in the Rajya Sabha, Minister of State for Commerce and Industry  Jyotiraditya Scindia said that UNI Global Union, Switzerland, had presented a paper on “Wall-Mart’s Global Track Record and the Implication for FDI in Multi-Brand Retail”. UNI global union represents over 900 trade union organisations and an estimated 20 million workers in the service industries. “The paper dwells on the business practices of Walmart in some countries and concludes, inter alia, that without adequate safeguards put in place, FDI in multi-brand retail will lead to widespread displacement and poor treatment of Indian workers in retail, logistics, agriculture and manufacturing,” Scindia said.

The report had been presented to the government in March. Last November, the cabinet had passed the proposal to allow 51 per cent Foreign Direct Investment (FDI) in the multi-brand retail space. But, it immediately caused a political firestorm and stringent opposition from its alliance partners.

The decision had been put on hold, but there had been recent hints from the government that it was planning to again unfreeze this policy.

In another written reply, Scindia said that the government had taken steps to evolve a “broader consensus” among various stakeholders.    He noted that consultations have been held with various stakeholders, including small and medium industry associations, food processing industry associations, farmers associations and consumer associations.

The minister added that 10 states and union territories have so far given their support for the FDI proposal in writing. The support has come from all the Congress-ruled states of Delhi, Manipur, Assam, Uttarakhand, Rajasthan, Maharashtra, Daman and Diu, and Dadra and Nagar Haveli.

“The chief minister of Jammu and Kashmir, through press statements, has publicly endorsed the policy and asked for its implementation,” added Scindia. The world’s biggest retailer, Walmart, has made no bones about its interest in India’s retail sectors, once it’s opened up to foreign investment.  It is currently operating along with Bharti group, a chain of wholesale cash and carry stores.

In a reply to another query, Scindia informed the Rajya Sabha that a writ petition had been field by social activist Vandana Shiva against Bharti Walmart and Bharti Retail for “directly and indirectly carrying out retail trading in violation of the FDI policy prohibiting multi-brand retail trade”.


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