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BJP warns of FDI protests

-The Telegraph

The BJP has slammed the Centre’s move to allow FDI in multi-brand retail, alleging this would destroy self-employment, create monopolies, facilitate foreign takeover of farming units and impair local manufacturing.

Sources in the BJP, which has a following among small and medium traders who own the most of the mom-and-pop “kirana” shops, warned that this section would start an agitation as the Centre’s decision amounted to the “Wal-Martisation” of India.

The BJP reminded Prime Minister Manmohan Singh that in 2007, Sonia Gandhi had cautioned him to examine the impact on the “livelihood security” of small retail operators before going ahead with the move.

The RSS-affiliated Swadeshi Jagran Manch had been campaigning against FDI in retail for the past three years. Its activists met BJP and non-BJP MPs to put forth their case.

Deepak Sharma “Pradeep”, co-convener of the manch’s northern chapter, claimed many lawmakers, including those of the Congress, privately “agreed” with the forum’s view.

But BJP sources conceded that apart from registering their protest, there was little they could now.

Their own understanding, sources said, is that it was the Prime Minister who pushed for opening up multi-brand retail to foreign investments. “He wants to shake off an impression that his government’s been lethargic on reforms. He also wants to stem FII outflows from India and rectify the dollar-rupee disparity,” a source said.

It is unlikely, though, that the BJP will overtly associate itself with any agitation that the Sangh’s swadeshi outfit might embark upon lest it sends “wrong signals” to overseas business and dents its image as a party that favours reforms.

But in public, the party’s House leaders, Sushma Swaraj and Arun Jaitley, criticised the FDI move. They dismissed as “misplaced” suggestions that sought to place India and China on a par in international retail trade.

“China is predominantly a manufacturing economy. It is the largest supplier to Wal-Mart and other international players. It generates a huge number of manufacturing jobs by being such a supplier. It obviously cannot say “no” to these chains to open stores in China when it is a global supplier. India, on the contrary, will lose both manufacturing and service sector jobs,” said a joint statement released by Sushma and Jaitley.

Another key point was that “consumer choices” required markets to be “fragmented rather than consolidated”. Allowing deep-pocketed foreign players will enable such a consolidation and sweep aside competition, the leaders said.

“International retail players operate on buying at the lowest and selling at the highest prices. They indulge in predatory pricing which initially eliminates competition and eventually creates monopolies. This can result in food chains of large nations being controlled by foreign organisations,” the statement said.

Sushma and Jaitley also asked if the government intended to hand over the food supply chain to foreign hands merely because of its “failure” to create cold chains, crucial for farmers to help preserve produce.

“The argument that India needs a supply chain in order to help the farm sector and that only foreign players can supply the same is to be rejected,” the leaders said in the statement.