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RSS wing cautions against 'nexus' of MNCs, Indian business houses in retail

RSS wing cautions against 'nexus' of MNCs, Indian business houses in retail

Swadeshi Jagaran Manch adopts a resolution against MNCs and Indian business houses, saying such ventures are detrimental not only to a large population engaged in multi-brand retail but also to manufacturers and consumers

These developments would result in a monopolistic situation, says SJM These developments would result in a monopolistic situation, says SJM

RSS affiliate Swadeshi Jagaran Manch (SJM) has cautioned the government against the "monopolistic" situation in Indian retail sector and urged changes in foreign direct investment (FDI) rules to block the entry of multinational corporations in the retail sector.

The 14th All India Sammelan of SJM held virtually on December 13 adopted a resolution against the alleged "nexus of MNCs" and Indian business houses, stating that such ventures are detrimental to not only a large population engaged in multi-brand retail in the shape of local kirana stores but also manufacturers in the micro and small industry sector as well as to consumers at large. It cited Facebook's investment in Jio Platforms, a company promoted by Reliance Industries Ltd as an example and wanted such partnerships to be disallowed from operating in India.

"The government should examine critically the real impact of such development on the overall employment in the unorganised retail as well as on the consumers at large. FDI norms should be suitably amended to block the entry of MNCs in multi-brand retail trade in India in any format directly or indirectly," the resolution said.

Also read: The Battle for Indian Retail

The national conference also took a strong stand against the sale of medicines through e-commerce and said that it should not be permitted considering that it impacts the health safety of people.  

Observing that Indian retail sector is one of the fastest markets in the world, which contributes 10 percent to India's GDP and 8 percent to employment, SJM said that in the last few months, MNCs have increased their presence in organised retail in India. "The MNCs are now collaborating with major local players to create an omnichannel retail model where the arrangement has been made in a very cunning manner so that MNCs can carry on multi-brand retail trade in India by circumventing FDI policy restrictions on them," the resolution said.

Also read: RSS affiliate says attempts to cut imports from China are visible

SJM noted that the recent developments will see MNCs participating in 'inventory-based model' in multi-brand retail trade where otherwise FDI is not permitted.

As a result, "Reliance Retail and Big Bazaar will dominate over other players in the multi-brand retail in a physical format such as Dmart, Croma etc., local kirana stores shall be transformed into fulfilment centres for Jio Mart, wholesalers shall be converted into warehousing lots for JioMart and Reliance Retail, Reliance Retails shall be in a position to purchase and store and warehouse a very large quantity of agro products and medical stores and pharmacies will have to compete with online sellers like Reliance Retails," the resolution states.

According to SJM, such developments may result in more than 38 percent of the Indian retail market share going to be with Reliance Industries Ltd alone. "These developments would result in a monopolistic situation where a single party shall not only be able to exploit suppliers and farmers by making purchases at cheaper rates but would also be able to exploit the consumers by offering goods at higher prices in the absence of competition in the market," the organisation said.

Also read: Beware! Reliance Retail warns against franchise scam by bogus JioMart websites