Amid rumours of FDI in retail, Left puts its foot down

Left parties have asked the union government to desist from allowing foreign direct investment (FDI) in multi-brand retail trade, saying there was resistance even within Congress to such a move.

''It is strange that the United Progressive Alliance government is contemplating this step when Congress itself has taken a stand against the entry of foreign companies in retail trade as stated in its resolution in the AICC session held in Hyderabad in 2006,'' the Communist Party of India (Marxist) and the Communist Party of India said in a joint statement issued in New Delhi today.

The opposition from the left comes amid reports that the commerce and industry ministry is planning to propose 100 per cent FDI in multi-brand retail, opening the doors to retail giants like Wal-Mart. However, the ministry will propose strict local sourcing requirements and mandatory investments in backward linkages, The Economic Times said on Tuesday.

Backing this up, Reuters reported that the commerce and industry ministry may issue a discussion paper on further opening up retail, currently restricted to wholesalers. But it may be just one of a series of discussion papers over the coming months to test the waters with different stakeholders to lift investment caps in sectors eagerly watched by investors, including retail, the report said quoting unnamed sources.

The Left, which has consistently opposed FDI in the sector, said retail trade in the country employed lakhs of people, whose livelihood would be 'jeopardised' if multinationals like Wal-Mart and Tesco were allowed entry.

''A wide spectrum of political parties, retail trade associations and public opinion is against such a move. The UPA government should desist from allowing FDI in multibrand retail trade,'' they said.