New Delhi: With BJP, JD(U), AIADMK, BSP and Trinamool Congress strongly opposing FDI in multi-brand retail, global chains may face problems in opening stores in 28 of the 53 cities which have been thrown open to retailers like Walmart and Carrefour.

However, the Central government on Sunday launched a campaign to sell advantages of FDI in multi-brand retail.

It may be noted that parties and alliances ruling in 11 major states have strongly opposed the decision of the Central government to allow foreign direct investment (FDI) in multi-brand retail which is dominated by small traders.
According to 2011 Census, there are 28 cities in 11 states ruled by the parties opposed to the decision. These include big cities like Bangalore, Kolkata, Ahmedabad, Patna, Allahabad and Bhopal which have over one million population, the threshold set by Cabinet while approving FDI in retail on November 24.
Excluding Punjab, BJP and NDA rule in eight states, including Madhya Pradesh, Gujarat, Karnataka, Chattisgarh, Chennai, Coimbatore, Jharkhand, Uttarakhand, Bihar and Himachal Pradesh. BJP indicated that states where the party is in power may not permit foreign stores.
Besides, Uttar Pradesh Chief Minister Mayawati has already stated that no foreign retailers would be allowed in her state.
The final authority for granting the trade licence rests with the states under their respective shops and establishment Acts.
Bihar Chief Minister Nitish Kumar on Saturday vehemently opposed the decision to allow 51 percent FDI in retail saying "It will ruin the retailers and lead to a point of unemployment".

Central campaign to sell FDI advantages

Under attack from the Opposition and UPA ally Trinamool Congress on allowing global retail chains in the Indian market, the government on Sunday launched a campaign to sell advantages of FDI in multi-brand retail.

In a full page advertisement in newspapers, the Commerce and Industry Ministry said foreign direct investment (FDI) in multi-brand retail will help farmers, create more jobs and benefit consumers.

It said there are several myths on the issue. These include that kirana and retail stores will lose and retail sector will be controlled by foreign stores.

On the other hand, the reality is that domestic retailers will benefit from sourcing their requirements from wholesale cash and carry store at a discount, it said.

The government said in countries like China, Thailand, Indonesia, Brazil and Singapore, where there are no caps on FDI, small retail stores have flourished.

The government advertisement said that there is another myth that FDI in multi-brand may result in job losses. "Contrary to this mistaken belief, FDI in multi-brand retail will generate 10 million new jobs."

It said that it is also a fiction that farmers would be exploited and lose their fields and crops to foreign investors. On the other hand, "farmers will receive better remuneration for their produce".

In a bold decision, the Cabinet on November 24 decided to allow 51 per cent FDI in multi-brand retail and removed the 51 per cent FDI cap on single brand retail.

Almost the entire Opposition and Trinamool Congress are up in arms against the decision and have paralysed Parliament in protest.

Some Chief Ministers of the states, ruled by the central opposition parties, have also expressed anguish on opening up of the sector for foreign chains like Walmart and Carrefour.

Uttar Pradesh Chief Minister Mayawati has made it clear that her state would not grant trade licence to the global chains. The final authority of issuing trade licences rests with the state governments.

Commerce and Industry Minister Anand Sharma has expressed hope that states would welcome the decision and open their doors for the foreign chains. He said he was sympathetic to farmers and consumers in those states where the mega stores
will not be allowed.