Retail FDI to help workers, says Mulford

In remarks that may raise the hackles of Left parties, US Ambassador David Mulford has brushed aside their criticism to opening up of retail and liberalisation of the foreign direct investment regime in banking and insurance, contending that the beneficiaries were the regular working people of the country.

He favoured changes in FDI caps in the insurance sector and removal of impediments to foreign banks in India.

"Why does Left oppose it (opening up of retail to FDI)? Are they opposed to farmers and business guys and others getting credit developing their livelihoods and their businesses? I don't understand what their opposition is about because the beneficiaries are the regular working people of India," Mulford said here.

The ambassador's remarks on the Iran nuclear issue made in the interview were reported earlier this week. Referring to the Left parties' argument that opening up of retail to FDI would hit small traders, he said the experience of other countries showed that large retailers and small shopkeepers could co-exist.

"I recognise there are complicated problems there because of the innate structure of your current small shop sector. But surely, you know, we have found in other countries that large retailers and small shopkeepers can co-exist perfectly well," he said.

To buttress his contention, Mulford cited the example of 7/11 shops being run by Indians in the US in the shadow of big shopping centres. "Indians. They are making a good living at it, too. And they are nice places and they make sales by virtue of the giant number of consumers that are pulled in to that area but who don't want to go into a big department store to buy one item. So, they stop at a 7/11 and buy a 6-pack of beer, toothbrush ...It is not a zero sum game," he said.

Welcoming the government's recent announcement on retail, Mulford said this would be lauded by President George W Bush. The US president is slated to visit India early March. "It (opening up of retail) is one of the things we have been interested to see happen," he said.