Fight Over Foreign Retail (Walmart!) Entry into India Enters a New Stage

ACORN International International Labor Organizing Organizing WalMart
India’s Prime Minister Manmohan Singh

New Orleans      Desperate to hold onto power with national elections coming in 2013 and beset by crises over coal, telecom, and slowing growth, India’s Prime Minister Manmohan Singh, announced modifications in foreign direct investment in multi-brand retail, potentially paving the way for Walmart, Carrefour, Tesco, Metro, and other multi-national companies to enter the growing Indian market directly with 51% control rather than as secondary partners.  Singh was quoted in the Times saying “The time for big-bang reforms has come and if we go down, we will go down fighting.”  ACORN International’s affiliate ACORN India and the Indian FDI Watch Campaign, which have been fighting for accountability before modifications for the last half-dozen years, believe Singh’s remarks could be prophetic, if in fact these changes are now implemented.

Make no mistake, we and others have issued a press release yesterday in Delhi and have joined the call for nationwide protests on Monday (see below), so the fight is on, but as we enter this next stage of this long campaign the skepticism in the financial press about whether this will all now come to pass is not only passed on the political difficulties which led to a parliamentary crisis last fall, but also about the significant concessions we won over time and during the “suspension” of the government’s earlier action.  Reviewing briefly, they include the following:

  • 30% of products have to be Indian sourced.  We have argued that without such a provision, India was going to be flooded by Walmart’s Chinese sourcing.
  • 50% of investment has to be infrastructure within 3-years that supports better sourcing from Indian farmers and others.  We have argued that community benefits were essential.
  • None of this applies to anything other than cities over 1 million people and their suburban rings within 6.2 miles of the town center.  We have argued that the character of the Indian economy and its existing employment had to be protected.

There’s more including the trump card that none of this can happen without being approved by the state governments and the individual localities.   In a number of major states, like West Bengal with its mega-city, Kolkata (Calcutta), the governor has already rejected these modifications.  In some of the most populated states, there have also been indications of rejection.  In short, were this to emerge from Parliament, this is the beginning of the new fight, just moving to another stage, a more local stage where we are stronger frankly and one that will play out over coming years.  Even the Times and the Wall Street Journal, both of which were quick to embrace the government’s proposed actions last fall as fait accompli were restrained this time and noted that this might still not come to pass even at the national level.

In a country of small shopkeepers, traders, hawkers, street vendors and others employing more than 10 million as workers, this change has significant impact.  This campaign has long legs and continues to move quickly.

Below is the press statement of Dharmendra Kumar and the India FDI Watch Campaign:

New Delhi 14th Sept. 2012

PRESS STATEMENT                         

Immediately Stop the removal of the suspension on FDI in Retail

Leaders of mass organizations of street vendors, workers, small shopkeepers, small manufacturers, joined by civil society organizations, consumer activists, environmentalists strongly condemned the Govt. of India decision to remove the suspension on FDI in multi-brand retail.

In a press statement issued here today, Mr. Shaktiman Ghosh, General Secretary, National Hawker Federation, said that the decision has nullified the Govt. approval to Street Vendors (protection of livelihood and regulating street vending) Bill 2012. He said that livelihood of hawkers cannot be protected merely by creating vending zones if corporations are allowed to out-compete them in streets. He demanded a complete ban all corporations selling fruits, vegetables, groceries, and daily use goods. He also demanded that no corporate store should be allowed within a 2 km radius of areas with a density of hawkers. He informed that National Hawker Federation would organize protests on Monday and Tuesday in all over India.

Dharmendra Kumar, Director, India FDI Watch said that the Govt. decision is a blow to parliamentary democracy and alleged that Govt. has backstabbed the nation after promising in the parliament to not to take the decision unless a consensus is reached. Mr. Kumar further alleged that India is kneeling down under pressure from US and European governments and their industry lobbyists as it still has no binding commitment on multi-brand retail services in multilateral, regional or bilateral agreements. He termed the cabinet decision for 51% in multibrand retail as letting off wild bulls of giant retailers without checks and balances such as regulations on number, size, location and provision of an economic needs test for opening a store as is the case in many countries around the world.

Kishan bir choudhary, Chairman, Bhartiya Krishak Samaj (Indian Farmers Forum) stated that FDI in retail would lead to monopoly of agricultural market and farmers would be taken for a ride by corporations. FDI backed retailers would dictate terms to farmers under contract farming and would turn independent farming families as bonded labour.

Vijay Prakash Jain, General Secretary, Bhartiya Udyog Vyapar Mandal (All India Federation of Traders and Manufacturers) termed the cabinet committee on political affairs decision as disaster for small traders and micro, small and medium industries.

Mr. Mohan Gurnani, President, Federation of Associations of Maharashtra said that our Govt. is refusing to learn from the experiences around the world and even failing to learn from its own experience of not being able to stop foreign cash and carry wholesalers from circumventing rules. He said that the infamous retail giant of the world Wal-Mart has entered from the back door using Bharti-Airtel as its fig leaf circumventing the wholesale cash & Carry permission. This is a gross transgression of the intention behind Wholesale Cash and Carry Permission. He accused that Bharti is only a thin cover for Wal-Mart’s profit making proclivities as it will only function as a fixed margin operator. The warning bells are dire for our small manufacturers, suppliers, shopkeepers and street vendors.”

street vendors in New Delhi