An Indian parliamentary panel has recommended foreign and large domestic companies be banned from retailing food, and that no more licenses for wholesale stores be issued.
The recommendation is the latest blow to India’s nascent modern retail sector, which has faced fierce opposition from the country’s traditional retail unions.
The government does not have to follow the recommendations of the panel’s report, which was submitted to parliament yesterday, reported The Economic Times.
“Government should stop issuing further licences for ‘cash-and-carry’, either to the transnational retailers or to a combination of transnational retailers and the Indian partner, as it is mere a camouflage for doing retail trade through back door,” said the report as quoted in The Times.
It claimed further expansion of the modern retail sector, which currently only accounts for 5 per cent of India’s total retail market, would diminish the role of small businesses and cost jobs.
The panel recommended the government set up a regulatory authority to monitor large retailers for anti-competitive behaviour, and to aid small retailers.
India’s government has historically been sympathetic to the cause of small ‘kirana’ retailers.
The new UPA-led government that gained power in last month’s elections, however, it considered to be pro-business, and is expected to loosen restrictions on foreign retail ownership.
The report came just eight days after the opening of the first Bharti Wal-Mart joint venture wholesale store in Amritsar, Punjab.
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