The Tamil Nadu Chamber of Commerce and Industry and Agro Food Chamber of Commerce and Industry have urged the Centre to withdraw the paper floated by Department of Industrial Policy and Promotion (DIPP) on allowing FDI into retail sector.
Floated by the DIPP in July, the discussion paper has asked the stake holders and trade bodies to submit their opinion in allowing foreign direct investment (FDI) in multi-brand retail trading sector before July 31.
Addressing a meeting organised here on Wednesday jointly by the two bodies, S. Rethinavelu, president of Agro Food Chamber, said that 51 per cent FDI was allowed at present in single brand retail trade and 100 per cent FDI was allowed in ‘cash-and-carry' wholesale market. These two moves saw FDI inflow of Rs. 900 crore and Rs. 1,500 crore respectively.
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These figures are relatively small as the global management consulting firm McKinsey and Company had projected the Indian retail sector to grow to Rs. 20 lakh crore by 2015. “Retail shops are largely family-run in India. Allowing FDI will endanger the lives of over 4 crore retailers and their 20 crore dependents,” he said.
This issue, he said, had been discussed threadbare on many times with even a Parliamentary Standing Committee chaired by the BJP leader Murali Manohar Joshi recommending to the Government to impose blanket ban of FDI and entry of domestic corporates into retail sector.
Mr. Rethinavelu also termed as a fallacy that FDI would improve the agricultural post-harvest infrastructure as even now either the Government could do it or encourage private sector here through incentives.
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N. Jagadeesan, president of TN Chamber of Commerce, said that England, which allowed MNCs and FDI into multi brand retail sector in 1980, saw over 4.5 lakh people lose employment and over 25,800 retail shops shutting down owing to this decision. The impact was similar in the Asian countries of Thailand and even in Japan.