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Category: Global Economy Sub-category: Indian Economy
Document type: news
Multinational retail chains are facing the wrath of international protesters in India even before the country allows this particular sector to open.
At the opening of an international stakeholders' meeting on the implications of foreign direct investment in India, Switzerland-based UNI Global Union has stepped up a campaign against multi-brand foreign direct investment in India's retail sector even as the government seems to have put the matter on the hold.
The UNI is urging the Indian government to use its decision to put FDI in multi-brand retail on hold so as to have a close look at the threat that Walmart represents to India's economy, as a key part of its on-going consultation process.
UNI Global has released a report on FDI in retail, and is already learnt to have given its input to the ministry of commerce and industry on this matter.
Some key points of the report are: One, without adequate safeguards in place, FDI in multi-brand retail will lead to widespread displacement and poor treatment of Indian workers in retail, logistics, agriculture and manufacturing. Second, FDI without strong conditions in place could lead to massive disruption of the Indian economy and society. Third, Walmart says it will eliminate unnecessary costs, but instead the company will transfer the burden of these costs onto supplier companies, manufacturers, retail workers, farmers, and society at large. Finally, the report examines the track record of Walmart, the largest retailer in the world, with global revenue of $421 billion in 2010 that is 3.5 times the revenue of the next-largest competitor.
Further, the UNI Global said that the suspended decision on FDI stipulates that the incoming multinationals led by Walmart would have to source only 30% of its supplies from smaller Indian enterprises. It's neither enough nor enforceable. It matters because Walmart is the number one retailer in the world and controls a large part of the global supply chain. India's economy will be transformed but not for the better if the Walmart model is applied.
Moreover, UNI's South African affiliate, the South African Commercial Catering and Allied Workers Union (SACCAWU) took part in the meet as well and brought across a message from the unions who have been fighting the Walmart/Massmart merger there. SACCAWU and other leading South African unions have shown that it's possible to win concessions from Walmart by standing up to them.
However, the Traders' associations in India have been actively agitating against any move by the government to allow multi-brand retail FDI, and showed their nationalistic colours as well.
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UNI Global Union is a global union federation for skills and services, gathering national and regional trade unions. It was launched on January 1, 2000. Its more than 900 affiliated unions in 140 countries have 20 million members. The head office is in Nyon, near Geneva, Switzerland.
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