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British MP opposes FDI in India retail

Opposition to foreign direct investment (FDI) in the country's retail sector from an unlikely quarter – Britain, which is a key point of origin for companies looking to build supermarkets in India.

business Updated: Jul 15, 2010 00:06 IST
Joseph Gosden

Opposition to foreign direct investment (FDI) in the country's retail sector from an unlikely quarter – Britain, which is a key point of origin for companies looking to build supermarkets in India.

British MP David Amess told Hindustan times that the Indian Government to tread"very carefully" if it opened up the multi-brand retail sector to FDI because the entry of companies like UK-based retailer Tesco would"literally change the fabric of life in India" by endangering small shops.

Amess chairs the British All Party Parliamentary Group on Small Shops (APPGoSS).

The government is currently holding consultations on allowing companies such as US-based Wal-Mart, France's Carrefour and Tesco to come in. Critics have urged the government to insert safety clauses following protests from small independent retailers that potentially face closure.

"Britain was a nation of small shopkeepers," Amess."All of that has changed and this is because of the supermarkets, led by Tesco. It is impossible for small shop keepers, who have so much to offer, to compete with the prices of the supermarkets".

APPGoSS Secretary Bob Russell MP, added "the expansion of supermarkets in Britain has been to the serious detriment of small shops, there is no question about this".

One in six small stores in Britain have gone out of business in the last decade, the group said.

However, Tesco, suggesting a careful move forward, told HT in a statement that "retail in India is very different to the UK and we are moving in an evolutionary way with our franchise agreement with Trent, the retail arm of Tata."

Tesco cited benefits to consumers and a reduction in inflation as a result of its work.

According to Delhi based think-tank the Centre for Policy Alternatives, 98 per cent of retailing in India is"unorganised" and at risk from FDI.

Atul Patel, an Indian origin Briton who runs Pelican News, a small store in North West London. said his family-run business was now struggling to survive, with sales of meat, groceries and fresh fruit having dropped by at least a fifth after Tesco opened a store hear his.

Tesco is the leading British supermarket with a market share of 30.5 per cent.

Dhamendra Kumar, of activist group FDI Watch said he was"completely opposed" to FDI in retail."They are all lobbying like mad," he said, calling the FDI plan a"very insensitive approach to the social fabric of India that could affect he livelihoods of millions of people".

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