Re-examine FDI in retail, SC tells government

Giving a bit of a fillip to the protests against foreign direct investment in multi-brand retail, the Supreme Court of India today asked the union government to ensure that its recent policy to allow FDI in the sector does not push small traders out of business.

Responding to a public interest litigation (PIL) on the issue, the apex court asked the government to file an affidavit within three weeks to show that FDI in retail would not kill competition.

No doubt taking into view recent concerns raised in Mexico and other developing countries that retail multinationals were jacking up sale prices while paying farmers peanuts, the court noted that international experience shows that big firms enter a sector, artificially lower the prices of products to force small traders shut shop, and jack up prices once they achieve monopoly.

The court said that though it is not a policy maker, policy cannot always be sacrosanct and it should be within constitutional parameters.

It added that there should be some regulatory measures in place to protect the interests of small traders.