Rajya Sabha members oppose FDI in retail sector

New Delhi, May 23: Several members in the Rajya Sabha today opposed the government's proposal to allow foreign direct investment (FDI) in retail sector, saying the move will result in large-scale unemployment due to shutting down of domestic businesses.

Mr Murli Manohar Joshi of the BJP said the government should study retail models of various countries before allowing FDI in Indian retail sector.

Also, domestic industries must improve cost-efficiencies to compete with foreign brands. ''The FDI in retail sector will create centralised procurement outlets and create monopolies,'' he said.

Mr Joshi said an investment of Rs 8,300 crore by a multinational retail chain will create only 10,195 jobs for English-speaking Indians.

Supporting his claim, Mr Sitaram Yechuri of the CPI(M) said the government should distinguish between FDI in retail and manufacturing sectors.

The retail sector's contribution to the GDP is about 11 per cent and 90 per cent of the country's workforce is employed in the unorganised sector which acts like a social security net.

Mr Yechuri said manufacturers get only a fraction of list prices by multinational retail chains.

Mr Banwari Lal Kanchal of the SP said global retail chains typically operate with 70 per cent profit margin due to their high establishment costs.

UNI