Tamil Nadu Chamber of Commerce and Industry has requested the Chief Minister, Jayalalithaa, to ensure that foreign direct investment (FDI) continued to remain banned in the retail trade of fruits, vegetables and grocery.

The Union Cabinet on Thursday approved the proposal for allowing 51 per cent FDI in multi-brand retail sector besides increasing the ceiling for FDI in single brand retail to 100 per cent from the present 51 per cent. This paves the way for global retail chains such as Walmart, Tesco and Carrefour to open shops in India.

In a statement issued here, chamber senior president S. Rethinavelu said that it was a matter of great concern that the doors were being opened for multinational companies into the multi-brand retail trade. This would result in lakh of small traders getting displaced.

Even though the Committee of Secretaries had proposed certain riders such as pegging the minimum FDI as Rs.500 crore, half of which should be spent on establishing back-end infrastructure, he said that it had ignored the recommendations on this subject made by a Parliamentary Standing Committee. Headed by the veteran Bharatiya Janata Party leader Murali Manohar Joshi, the Standing Committee had called for imposing a blanket ban on foreign retailers from entering the fruits, vegetables and grocery segment.

Allowing huge foreign companies into this sector would harm the country's food security, Mr. Rethinavelu contended, adding that millions of workers would also lose their jobs at retail shops were one of the biggest employers in the country.

Wal-Mart, he said, had an annual turn over of Rs.18 lakh crore, Carrefour Rs.5.85 lakh crore and Tesco Rs.4.5 lakh crore. With such a huge war chest, they would be able to sustain losses in initial years, undercut their competition and wipe out local traders, he said, adding that Thailand now had three foreign retailers controlling 38 per cent of the market.

The trade body had also written to the Prime Minister Manmohan Singh urging him to maintain status quo or consider removing retail trade in grocery, fruits and vegetables from the purview of FDI.

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