Source:

November 24, 2011 23:50 IST

Bharatiya Janata Party on Thursday asserted that it would use all mediums of democratic protest to oppose the move to allow Foreign Direct Investment (FDI) in multi-brand retail, saying this would harm self-employed retailers.

Leader of Opposition in Rajya Sabha Arun Jaitley said a Cabinet note has been circulated on allowing FDI in multi-brand retail- where "everything conceivable under the sun is available".

"BJP is completely opposed to FDI in retail sector. Our economy is dominated by the services sector which accounts for 58 per cent of India's GDP. The retail chains in India, both small and big, account for a major segment of this sector. FDI with deep pockets entering this segment will have an adverse impact on our growing domestic retail sector," he said.

The party maintains that self-employment in India is the single largest source of jobs with an overwhelming section of the population being self-employed.

United Progressive Alliance-I had already allowed 51 per cent FDI in single brand retail which aims at the well-off. BJP favours a fragmented market so that the consumers have a wide choice and feels consolidated markets make the consumer captive.

"No one player should be allowed to dominate the market. Allowing foreign players, with deep pockets, enables such a consolidation. It will sweep aside competition and involve a loss of jobs, both in the manufacturing and services sector," Jaitley said.

He insisted that BJP will use all mediums of democratic protest inside and outside Parliament to oppose FDI in multi-brand retail.

Jaitley rued that the government had not discussed this issue with the opposition extensively and said it would have been better if this had been done.

"We have made our position on this issue public. We will oppose this issue," he said. The small and big traders constitute a big chunk of the BJP votebank.

"Jobs in the retail sector will be lost in the name of eliminating middlemen. Jobs in the manufacturing sector will also be lost because structured international retail makes purchases internationally and not from domestic sources. This experience has been felt in most countries which have allowed FDI in retail," Jaitley said.

He argued that this was the case as the international retail players operate on buying at the lowest and selling at the highest prices.

"They indulge in predatory pricing, which initially eliminates competition and eventually creates monopolies. This can result in food chains of large nations being controlled by foreign organisations," the party said.

It further maintained that the number of retail establishments as at present will get substantially reduced in favour of large establishments. "International retail does not create additional markets, it merely displaces existing markets," Jaitley said.

BJP also feels India's case should not be compared with China as the latter is predominantly a manufacturing economy.