How much beneficial will be the multinational retail chains for the country?

(Dr. krishan Bir Chaudhary)

One vital question agitating the public mind today is – Do we need foreign direct investment (FDI) in retail chain? If so for what? The Government says that FDI in retail chain will benefit the farmers and consumers and create about a crore jobs in the country. This tall claim of the Government is nothing but a hoax and without substance.

Usually the demand for allowing FDI is made by the sector or the industry which is in need of capital and technology. But in the case of allowing FDI in retail chain no such demand was put up by the farmers’ or consumers’ bodies.

The fact is that Europe and the US are reeling under economic recession and the multinational companies based in these regions are eager to invest in soft targets in the Third World to get maximum benefit.

The Indian Government in turn wants to increase the FDI inflows with the intention of arriving at the magic growth figure of 9% or 10%. If the Government is so ambitious of increasing the FDI inflows then why not it encourage such FDI inflows in large industries and sectors which are capital starved and need modern technology?

Globally the food business is controlled by few retail chains like Wal-Mart, Carrefour, Tesco, Ahold, Kreger, Rewe, Aldi, Ito-Yakado, Metro group, Intermarche. A report of UK’s Competition Commission in 2008 has said that farmers were squeezed out and put to heavy losses by the retail chains. The entry of retail chains has displaced thousands of independent proprietors of retail shops every month.

If this is the case of farmers in the developed world what would be the fate of Indian farmers? The entry of multinational retail chains in the country would endanger food security. The retail chains would control all the inputs including seeds and the farmer will grow only what the retail chains want them to grow.

But the produces of the farmers may be subjected to rejection on basis of colour and size and for other fake norms. The retail chains would be free to import any food items from outside the country to run their business. Thus the multinational retail chains would controlling the food economy of the country, displacing farmers from their livelihood.

Globally Wal-Mart, Tesco, Carrefour and Metro group together provide around 3.1 million employment. In this context, it is ridiculous for the Indian Commerce and Industry Minister Anand Sharma to say that retail chains in India would provide 10 million jobs in the country. The real fact is that the retail chains would displace more than 40 million small retailers from their livelihood.

Finally the consumers will have to pay high prices for food in malls. They will be deprived of sourcing cheap and fresh fruits and vegetables from local retailers. The rejected GM foods will be dumped in this country.



(Editorial : Kisan Ki Awaaz Magazine)