— Photo: Ramesh Sharma

WHERE THE CRUNCH LIES: Commerce and Industry Minister, Kamal Nath addressing Economic Editors' Conference in New Delhi on Thursday.

NEW DELHI: The opening up of the retail sector to foreign direct investment (FDI) is likely to get delayed as the Government is as yet unable to evolve a model that will protect the interests of small shopkeepers and, at the same time, generate additional employment.

To a query on FDI in retail at the Economic Editors' Conference here on Thursday, the Minister for Commerce and Industry, Kamal Nath, said: "We are in agreement with Left parties that FDI should not replace or displace jobs. We are yet to evolve a model...the main problem is between large and small players and not domestic versus FDI.

The Minister told economic editors that on final count, the whole discussion on FDI in retail centred round one major issue, that of big retailers displacing the small retailers. "It makes no difference whether the investment is domestic or foreign. The debate now is big versus small and not FDI versus small `kirana' stores. The idea is to see that small shopkeepers do not get displaced and employment is generated," he said.

The country's retail trade, Mr. Kamal Nath said, was expanding by a robust 22 per cent each year, with the addition of 25 million middle-class consumers. In this scenario, he said, the interests of small-time grocers had to be protected, not by the "colour of money" alone.

For, if the argument is to be extended, the small-time shopkeepers' interests could well be impacted by the chain of superstores and marts being promoted by large domestic houses.

Alongside, Mr. Kamal Nath said, there was a need to step up investment in food processing and creating backward linkages as almost 40 per cent of the fruits and vegetables produced rotted each year.

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