BJP opposes FDI in multi-brand retail

November 24th, 2011 - 7:25 pm ICT by IANS  

Bharatiya Janata Party New Delhi, Nov 24 (IANS) The Bharatiya Janata Party (BJP) Thursday said it was opposed to foreign direct investment in multi-brand retail being considered by the government as it would adversely affect the services and manufacturing sectors.

The union cabinet is expected to take up a proposal to allow FDI in multi-brand retail in India. The government has already approved 51 percent FDI in single brand retail.

Leader of Opposition in the Rajya Sabha Arun Jaitley said: “We oppose foreign direct investment in multi-brand retail. we are not against FDI but it has to be addressed sector wise.”

He said retail sector is a big component of the services sector which contributes to 58 percent of India’s gross domestic product.

Allowing FDI in multi-brand retail, which means opening the gates of the Indian market to the big chains like Walmart, would not only dent the retail sector but also affect the manufacturing sector.

“Fragmented markets always result in competition which is good for the consumer,” he said.

Jaitley said FDI in retail would result in loss of jobs in the name of removing middlemen. He said international players resort to predatory pricing, selling cheap initially and then gradually increasing the prices to finish competition.

This way india’s food supply chain can be controlled by the foreign players in the future, he said.

Criticising the government argument that india needs a supply chain in order to help the farm sector and only foreign players can provide it, Jaitley said international players do not have a role in building roads and generating electricity, both of which are essential for growth of business.

He also said the comparison between India and China, which has allowed FDI in retail, is wrong. China, he said, is a manufacturing economy and supplies to world’s largest retail player Walmart and other big players.

“China generates large number of manufacturing jobs by being such a supplier,” said Jaitley.

The BJP leader said the party would take up the issue before people if the government went ahead with FDI in multi-brand retail.

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