CAIT opposes 100% FDI in FMCG retail

The recent Union Budget announcement of allowing 100% FDI in food sector has been strongly criticized by Confederation of All India Traders (CAIT). According to CAIT, allowing FDI in food sector is nothing but a step in direction of opening retail sector for FDI much against the declared commitment of not allowing FDI in retail of the government. We strongly oppose this move of the Government which will enable the global retailers to control, dominate and monopolise the food sector of the Country. The trade fears that today it is food sector and tomorrow entire retail may be opened on one pretext or the other. We see it as a major shift in policy of the Government and that too without taking traders into confidence -said CAIT.

Praveen Khandelwal, General Secretary, CAIT, further explained, "FDI in food is allowed on pretext of reducing wastage and farm. It appears that perhaps Government has not taken cognisance of report of Indian Council of Agricultural Research (ICAR) released in year 2010 which stated that food wastage in India is merely 0.8% to 10% which is not that much alarming for which we need MNCs"-said CAIT. The Government is committed for not allowing FDI in Retail and as such any move to allow MNCs into Indian retail trade will amount betrayal of confidence of the small businesses in India.”

The Indian Council of Agricultural Research (ICAR), a body under the Ministry of Agriculture, commissioned a post harvest loss study with Central Institute of Post Harvest Engineering & Technology (CIPHET), Ludhiana and submitted its report to the then Government in September, 2010 which clearly state that food wastage in India is only between 0.8% to 10% except mushroom which is 12.5% and Guava which is 18%. "Unfortunately, neither the Union Cabinet and nor the Parliament was informed of this report by either the then Commerce Minister Mr. Anand Sharma and Agriculture Minister Mr. Sharad Pawar and a song of 40% food wastage in India was sung by one and all facilitating the decision of UPA Government of allowing 51% FDI in multi brand retail. The argument that FDI in multi brand food retail will curb food wastage is a fallacy since food wastage in India is very minimal,” said Bhartia.

CAIT urged the Government to issue a White Paper on FDI in Retail and said that arguments advanced in favour of allowing FDI in retail are based on merely on assumptions without considering the fallout of such global retailers in countries like USA, UK, and Europe etc., where these retailers have failed to provide any advantage to the respective country and are being advocated by proponents of MNCs. Allowing FDI in any form of retail including food retail will have adverse impact on traders, farmers, hawkers, transporters, small industries, consumers and other sections of retail trade and will result into mass unemployment.