NEW DELHI: Retail traders, known to be traditional supporters of either the Congress or the Bharatiya Janata Party, are increasingly turning to the Left to take up cudgels for them against the move to introduce foreign direct investment (FDI) in retail trade.

The Left parties are drafting a note opposing FDI in retail. Retail traders' associations have accepted Communist Party of India general secretary A.B. Bardhan's suggestion that they organise conventions to mobilise opinion if they cannot take to the streets.

Consistent opposition

Though the BJP changed its position after the National Democratic Alliance was voted out of office and is now opposing FDI in retail, trade associations are banking on the Leftin view of its consistent opposition to the move.

The BJP's position is of little solace to them as the Congress took a similar stance when it was in the opposition.

"The BJP is opposing FDI in retail today only for political reasons," said Chandrakant Sanghvi, chairman of the Foreign Trade Committee of the Federation of Trade Associations of Maharashtra, which has been regularly knocking on Left doors.

According to the federation, it was the Congress opposition during the NDA regime that prevented the introduction of FDI in retail then.

"As Leader of the Opposition in the Rajya Sabha, Manmohan Singh intervened in the House opposing FDI in retail. Today, he is singing a different tune. Only the Left parties have been consistent."

Draft note

In the draft note, the Left parties have highlighted that countries with FDI in retail — including China, South Korea, Singapore and Thailand — enacted in the recent past legislation to check the proliferation of malls and hypermarkets. For, the "growth in the number of supermarkets has invariably been accompanied by a concomitant decline in the number of traditional grocery stores."

Of the view that FDI in retail would have a negative impact on the already grim domestic employment scenario, the Left parties contend that it is "fundamentally different" from greenfield foreign investment in manufacturing which enhances the economy's productive base, technological capability and generates employment.

Unorganised retailing

The note highlights the adverse impact on employment — a primary concern of the United Progressive Alliance as articulated in the National Common Minimum Programme. "Retail trade contributes 11 per cent of India's GDP and currently employs over four crore people. Within this, unorganised retailing accounts for 98 per cent of the total retail trade."

This being the case, "any effort to invite foreign capital in this sector would inevitably cause labour displacement and, in the absence of any substantial improvement in the employment generating capacity of the manufacturing industriesin our country, is likely to play havoc with the livelihood of millions,'' says the note.

Add to this the predatory practices of the multinational retail chains that would destroy the rich diversity of products and producers in the Indian economy.

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