FDI in multi-brand retail to harm Indian workers: Global report

The Times of India

 FDI in multi-brand retail without adequate safeguards will

lead to widespread displacement and poor treatment of Indian workers in logistics, agriculture and manufacturing, the government today cited a global report on Wal-Mart as having said. Minister of State for Commerce and Industry Jyotiraditya Scindia informed the Rajya Sabha in a written reply, that Switzerland-based UNI Global Union has presented a paper on 'Wal-Mart's Global Track Record and the implication for FDI in multi-brand retail'. "The paper dwells on the business practices of Wal-Mart in some countries and concludes 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," he said.

 The US-based world's largest retailer Wal-Mart has already

established its presence in the Indian market through a wholesale cash and carry stores. It is among several other global chains waiting for implementation of the government decision to permit 51 per centforeign direct investment (FDI) in multi-brand retail. The Cabinet decision of November 24, 2011 could not be implemented in the face of strong opposition from UPA ally Trinamool Congress and several state governments. Scindia also said that 11 states and union territories have conveyed their support to the Centre for opening the sector to foreign investment.

 In an another reply, Scindia said that a writ petition has been

filed by Vandana Shiva, an NGO activist, in the Delhi High Court alleging that Bharti Wal-Mart and Bharti Retail are directly and indirectly carrying out retail trading in multi-brand in violation of the FDI policy. "The matter is sub-judice," the minister said. Bharti Wal-Mart is a 50:50 joint venture between Wal-Mart Stores Inc and Bharti Enterprises that operates wholesale stores in India. The company currently operates 17 wholesale cash-and- carry stores under Best Price Modern Wholesale stores in India.

 I in multi-brand retail will lead to widespread

displacement and poor treatment of Indian workers across the production and distribution chain. It would also replace a whole set of small traders, including hawkers, middlemen and even farmers over the long term as the retailer starts sourcing overseas, global trade union federation UNI Global Union said in a report. UNI Global has cited the business practices of Walmart in some countries, including the United States, where the retailer has tried consistently to undermine workers' interests. ''We believe that without adequate safeguards put in place, FDI in multi-brand retail will likely lead to widespread displacement and poor treatment of Indian workers in retail, logistics, agriculture and

 The report discusses the potential effects of

globalised modern retail, on four groups of stakeholders - retail workers, small retailers (kiranas and hawkers), supply chain intermediaries (wholesalers), and producers. It examines the track record of Walmart, the largest retailer in the world, with global revenue of $421 billion in 2010, 3.5 times the revenue of the next-largest competitor. Earlier in July, UNI Global had written formally to Prime Minister Manmohan Singh in July asking for an inquiry into retail giant Wal-Mart's operating practices in India (See: Global union wants inquiry into Wal-Mart's practices in India)