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Indian Shop Owners Protest Foreign Superstores

Activists from India's main opposition Bharatiya Janata Party (BJP) burn an effigy depicting India's Prime Minister Manmohan Singh during a protest against the government's decision to allow Foreign Direct Investment (FDI) in the retail sector, in New Del

In India, millions of shop owners closed down Thursday as traders held a day-long nationwide strike to protest the government’s recent decision to allow foreign retailers like Walmart to enter India. As a fierce debate raged over the issue, the government tried to tone down strong political opposition to the reform measure.

The usually bustling Rajouri Garden market in New Delhi wore a desolate look.

Owners of small shops which dominate India’s retail landscape voiced fears that the government’s decision to allow foreign superstores into India will force them out of business. Ramesh Khanna sells women’s garments.

“They are opening the door for whole of the world to come and do business in our land…they are very big giants, they have very big investments, they will get [goods] at lesser rate, thereafter they will capture the market and go to their monopoly,” Khanna said.

Across bigger towns and cities, most markets were shut. In some places, shopkeepers held marches. Activists of the opposition Bharatiya Janata Party, which is supporting the strike, burned effigies of Prime Minister Manmohan Singh.

The daylong nationwide strike was spearheaded by Confederation of All India Traders.

Its senior official, Praveen Khandelwal, says that foreign superstores will wipe out competition in a country where mom and pop stores account for 95 percent of the retail industry.

“It will be a blow the existing retail system. The traders will be left with no other alternative but to shut down their shops and it will be a source of unemployment also to large number of people,” Khandelwal said.

Shop owners are not the only ones who are upset. The decision to allow foreign retail giants has also created a political impasse. Both opposition parties and the Congress-led coalition government’s allies insist on scrapping the decision to save local jobs.

Parliament has been stalled for days over demands that a vote should be held on the issue. The government has refused.

As the impasse persisted on Thursday, Prime Minister Singh met his allies to persuade them to drop their opposition. He is believed to have said that there will be no rollback of the decision.

Rajeev Shukla, junior minister for parliamentary affairs, says the opposition to the measure is prompted by what he calls “propaganda”. He says fears about allowing foreign superstores to set up shop in India are unfounded.

Shukla says everyone will benefit -- farmers, traders and those in search of work they will all benefit.

The government says foreign retailers will not hurt traders as there is enough space for them and family-owned stores in a retail industry that is expanding by 15 percent a year.

But the striking shopkeepers are not buying that argument. In Siliguri town in West Bengal state, Prabin Jouhar, President of the Siliguri Merchants Association, is worried about the future of small shops.

Jouhar fears that their businesses will come to an end very soon and they will be absorbed by the big stores. He says they have observed the strike to save their identity.

So far foreign retailers could only set up stores with Indian partners to sell to wholesalers. Two foreign retailers, Walmart and Tesco have opened a handful of such stores with local firms, but they cannot sell directly to consumers.