Left sees red, govt to examine Wal-Mart's deal with Bharti

With the Left asking the government to prevent the deal between Wal-Mart and Bharti, calling it "backdoor" entry of FDI in retail, the government has decided to examine the arrangement.

Commerce Minister Kamal Nath today promised to "look (at) whether permissible limits have been adhered to... We will see whether it as per rules and regulations."

Nath's remarks came after the CPI(M) Politburo asked all parties, trade unions and mass organisations opposed to FDI in retail to launch a nationwide movement to prevent the entry of multinational retailers like Wal-Mart into India. The CPI also called upon party units to start protests against the deal.

The CPI(M) said FDI in retail was not allowed under the existing policy and Wal-Mart's franchise pact with Bharti was an attempt to circumvent the policy to gain a foothold in the Indian market.

The party reiterated its opposition to the entry of MNCs in retail saying, "It would cause massive displacement of unorganised retailers across the country besides squeezing domestic manufacturers and farmers."

Expansion of Wal-Mart had caused closure of small stores and pauperisation of poor communities even in the United States, the party said.

In the context of massive unemployment, such employment-displacing FDI was the last thing the Indian economy needed, the CPI(M) said, adding that what was urgently required was a strong regulatory framework for the domestic organised retail sector, which was expanding at a rapid pace.

The Left had earlier expressed opposition to FDI in single brand retail and in warehousing and wholesale trade. These steps were meant to pave the way for MNCs like Wal-Mart to enter the retail sector, the CPI(M) said.

"Based on international violation of workers' human rights and exploitation of women and children as a source of cheap labour, this American company has been banned in many third world countries and was issued a law suit," CPI General Secretary AB Bardhan said.

Wal-Mart India plan hits political wall; Govt to examine deal New Delhi, Nov 28 (PTI) Global retail giant Wal-Mart's entry into India through a tie-up with corporate major Bharti was today sucked into a political whirlpool, with Left parties dubbing the deal as a "backdoor entry" by the MNC and.

A day after the announcement of the deal, which was widely welcomed by the corporate bigwigs including Reliance Industries' Mukesh Ambani, the CPI-M and CPI alleged that Wal-Mart had circumvented the laws of the land to gain entry into this booming market.

As per the agreement between the two corporate giants, Bharti would manage the front-end of the business, while Wal-Mart would take care of the supply chain, logistics and other back-end operations.

The Left parties, which provide crucial support to the Congress-led UPA government, also asked trade unions to launch a nationwide action against the entry of Wal-Mart and other multinational retailers into the domestic market.

"FDI in retail trade in not permissible under the existing policy on foreign investment in India. The Wal-Mart's franchisee agreement with Bharti Enterprises is an attempt to circumvent existing policy regulations to gain a foothold in the Indian market," CPI(M) said in a statement.

While India has not allowed FDI in multi-brand retail format, foreign investment is permitted in wholesale trade as well as logistics and back-end support.

Nath said the government will see whether farmers would benefit from the agreement and what impact it could have on local neighbourhood stores, adding that government was keen to attract foreign investment in logistics and supply chain.