The Hindu Business Line : Left, BJP oppose FDI in single brand retail

THE Left parties and the BJP have opposed the Government's decision to allow 51 per cent foreign direct investment (FDI) in single brand retailing because a single brand may cover a large variety of products. The BJP has termed the move a cruel joke on small businesses and stated that it would oppose it both inside and outside Parliament.

In a statement the CPI(M) has said, "The retail sector has been opened up for the first time, allowing 51 per cent of FDI. The stipulation that it will be for single brand shops does not mean that it will apply to single product only but can cover variety of products under a single brand name."

"Our party's position is clear. We are opposed to FDI in retail sector," the CPI(M) Polit Bureau member, Mr Sitaram Yechury, said, adding that "the government says it will allow FDI in branded goods. But it is a loose term as anything can be branded. We want government to specify the items where FDI is allowed."

"Through this decision the UPA government has virtually opened up the retail trade to multinational giants. The decision of the government to open up the key areas will have serious deleterious effects on the economy and the life of the people," the CPI(M) said.

The CPI(M) and CPI said opening up the retail sector would lead to the entry of big retail chains and multinational giants, and asked the people to protest against the government's move.

The issue will come up for discussion among all the four Left parties at a meeting here on January 27. The parties, which are supporting the UPA coalition from outside, have already submitted a note on retail sector to the government.

According to the CPI national secretary, Mr D. Raja, "the retail sector contributes very significantly to the country's GDP and employment. If FDI is allowed in this sector, it will hamper employment opportunities."

"This move will hit the small traders and businesses hard. It's a cruel joke on them. We will also oppose it in Parliament in the coming session. We will also hold protests outside," BJP Parliamentary Party spokesman Mr V.K. Malhotra said.

On Tuesday the Cabinet allowed up to 51 per cent FDI in single-brand retail.

Chambers welcome move: Meanwhile, industry chambers have welcomed the move allowing FDI in retail. According to FICCI, the move is "a significant step forward" in attracting large FDI inflows.

The Associated Chamber of Commerce has urged the government to permit multiple brands in retail trade in India in due course.

The chamber feels that the move would also boost exports from the country and would not pose any threat to `Kiranawalas'. It would create competition that will eventually lead to benefits for the consumers.

The PHD Chamber of Commerce and Industry too has welcomed the decision saying the measure would go a long way in developing organised retailing in the country.