CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.

(An apex body of All Trade Associations & Federations)

Date: 24/07/2010
To,
The Secretary,
Dept. of Industrial Policy and Promotion,
Ministry of Commerce,
Govt. of India,
New Delhi

Sub :- Views and suggestion as invited on section-7 of papers entitle issues in resolution
concern relative to FDR in Multi-Brand Retailers.

Ref :- Discussion papers of foreign direct investment in multi-brand retail trading issued by
Dept. of Industrial Policy and Promotion, Ministry of Commerce.

Dear Sir,

At the outset we would like to thank you for inviting views and suggestions on the above
subject. Confederation of All India Traders through its research wing has been continuously
involved in studying the nature of Indian retail trade, the kind of person, involved and the
nature of transactions that takes place at lowest level with consumers. It is accepted fact that at
present there are about 33 millions kirana shops. The owner of these shops are said to be in
unorganized sector, which we call as self organized, to the extent of 90%. These retail outlet
owners are spread over in every nook and corner of the country. FDI in multi-branch retail trade
is expected to hit these traders the most. The majority of these traders are unaware of happening
at govt. level. Majority of them are not conversant with English (foreign) languages. They
know the national language Hindi and their respective regional languages. Confederation of All
India Traders demands that the discussion papers should be released in Hindi as well as in
regional languages to enable retail traders at large to give their views. Vide publicity of
issue of discussion papers and calling of objections should be made. Thus the due date of calling
objections / suggestions or views should be extended till 60 days from the date of release of this
discussion papers in Hindi and regional language.

It is necessary to mention here that Govt. had set up a Jt. Parliamentary committee to
study FDI in retail trade. The Hon’ble parliamentary committee of more than 40 MP’s
representing different parties took more than 2 years to study the subject and submit its report.
The committee had discussions with cross section of societies representing all stake holders.
Report has been duly tabled in both houses of the parliament. It is unfortunate that the
discussion papers refers to ICRIER report which was submitted in May-2008 based on limited
sample study but the discussion paper has totally failed to refer to the report of Joint
Parliamentary Standing Committee which was tabled in both houses on June 8th 2009. The
discussion paper has also totally failed to take into consideration people’s voice raised through
CONFEDERATION OF ALL INDIA TRADERS
Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)
Joint Parliamentary Committee. Thus Confederation of All India Traders demands that the
fresh discussion paper based of recommendations of Dr. Murli Manohar Joshi headed
Joint Parliamentary Committee report should be published.

The existing retail trade has proved its might over the years even during the period of
ultimate scarcity. Whatever shortcoming are being talked about are only due to lack of vision,
understanding and providing facilities such as power, finance etc. Indian retailers, which are all
in hands of govt. If the visionary govt. plans its internal trade properly makes available quality
and quantity of power and adequate need based finance at International rate available to
traditional retailers they can deliver better results then what govt. dreams FDI can do. Before
govt. takes any decision on FDI in retail trade Confederation of All India Traders demands
that the Central Govt. should announce a national trade policy that can help protect small
and marginal retail traders. Such national trade policy should be evolved after due
consultation with all stake holders. The govt. should work for the benefit and upliftment of its
people and domestic trade.

1. The policy laid down in the Discussion Paper is in utter disregard of the unanimous report of
the Parliamentary Standing Committee of Commerce headed by Dr. Murli Manohar Joshi which
recommended a `blanket ban on the entry of MNC’c and domestic Corporate Houses into
retail trade of India’. It is most surprising that the Govt. did not think it proper to differ with the
report of the Parliamentary Committee by analyzing its recommendations. Therefore, the
Discussion Paper reflects arbitrary and illogical conclusions.

2. FDI in retail will render crores of people jobless and will have prejudicial adverse affect on
Retail Trade. After Agriculture, retail sector is the largest employment generating sector in the
Country contributing about 10% of the GDP with more than 5 crore small shopkeepers and about
4 crore small & medium enterprises and self employed persons. About 30 crore people are
directly or indirectly dependent upon retail sector for their livelihood. About 3% of the retail
trade is in the organized sector and balance 97% is unorganized. The country’s retail trade is
expanding 10% to 12% every year with an addition of about 25 million middle class consumers.

3. It is apprehended that due to lack of level playing field and with potential resources the
MNC’s and domestic Corporate Houses can throw domestic retailers out of business. Once a
monopolistic situation is created it could hit the consumers due to lack of competition. Retail
activities in various forms such as Door to Door selling, Street Carts and Market Stalls, acts as
last resort for the unemployed, because of lack of jobs in manufacturing and agriculture sector.

4. In post independence era, no governmental efforts were made to develop the existing retail
trade in to structured organized retailing. Hence, instead of allowing Multi Brand Retailing in
retail trade, the Govt. should evolve a policy to upgrade the existing retailers by providing them
CONFEDERATION OF ALL INDIA TRADERS
Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

requisite assistance in terms of easy loans from banks and financial institutions on primary sector
landing rate and to evolve a scheme to upgrade and modernize the existing retail trade.

5. The one of the reasons that has been stated in the discussion paper is, domination of value
chain by the intermediaries and realization of only 1/3rd of the total price paid by the consumers
to the farmers. It is necessary to appreciate that present intermediaries are, the bullock cart men
in villages, transporter, Agent and small trader whereas in case of the global players the
intermediaries are the Brand Ambassadors who are paid crores of rupees, high consumption of
power, high cost of warehousing and transportation. Indian intermediaries have not only
contributed to the economy but also to the substantial social development of the Country.
Further, the small retailers are charged for keeping 2/3rd margin with them which is factually
wrong. Since year 2005 big corporate houses are also engaged in retail operations and their
prices are either higher or at par with the market prices. It establishes that the 2/3rd margin are
kept by these big retailers and in no way they are going to sell the prices at lower rates.
Therefore, allegations against retailers with keeping huge margin, is nothing but to malign the
trading community and finding ways to allow MNC’s to enter into retail sector.

6. It is said that MBR will prove to be a boon to farmers which is far from truth. The global
players will initially buy the products directly from agriculturists at attractive prices through their
procurement centers on contract basis or otherwise. Once the agricultural mandis and regulated
market yards are closed and farmers loose their contacts, they will radically reduce the
procurement prices. As they possess tremendous bargaining power, farmers will be forced to sell
their produce at cut throat prices and even will be forced to part with their agricultural land
which will render their status as merely employees of retail houses.

7. Due to lack of level playing field, our small retail stores, mid sized departmental and chain
shops would be severely hit, depriving millions of people of their jobs and livelihood. Such
uprooted section shall face much hardship as the Govt. has no plans for their rehabilitation.
While the Government has provided many concessions and implemented assistance schemes for
the protection and growth of corporate sector, no concrete steps have been taken to safeguard
interest and nurture the progress of Small and Medium sized retail units in the country. Prudence
demands that the Government should not disturb our traditional retail trade which is being
conducted without throwing any financial burden upon the Government.

VISION

8. The MNC’s should not be allowed to enter into retail trade. It is true that there is a growing
demand for modern retailing formats that offer a clean and hygienic environment to shop in at
competitive prices but this may not be a sound reason for the entry of global retailers in retail
trade and thereby allow them to rout our retailers and take away the livelihood of crores and

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

crores of people. Their entry would lead to “Crony (monopolistic) Capitalism”, at the cost of
established Retailers being rendered as destitute.

The arguments put forth by those who subscribe to the entry of MNC’s in retail trade are
summarized below:
1. It will spur the growth of organized Indian retail trade.
2. Consumers will be provided with a better range of quality-ridden products at competitive
rates in better and healthier ambience.
 3. They will invariably source the products only from local producers which in turn will
spur our industrial & economic growth. They may also be prompted to export Indian
products to their stores abroad.
4. Farmers will stand to gain by direct purchase from them.
5. New job opportunities will be created.

Most of these arguments are fallacious and have no leg to stand. Let us take one by one:

a. It will spur the growth of Indian Retail Trade

It is true that entry of MNC’s into retail would accelerate the transformation of unorganized
retail trade in our country into organized retail trade which accounts for just 3% of the total
retail trade at present. The sole aim of giant retailers is to dominate the markets they enter
into with the objective of eliminating the existing retailers. These corporate retailers given
their outsourcing skills and resources and adopting predatory pricing policy will provide
products at a cheaper rates than the smaller retailer in order to crush the competition and
when competition will eliminate retailers they will dominate the market by charging
monopolistic prices. Presently, the retail trade cannot be monopolized as it is managed by
crores of people. Once it is captured by few selected players, the monopoly factor can not be
ruled out. Ultimately, it will spur the growth of corporate retailers.

b. Consumers will be provided with a better range of quality-ridden products at competitive

rates in better and healthier ambience.

To achieve this we don’t need investments from global conglomerates. Organised retail trade
accounts for 20 percent of total retail trade in China and 40% in Thailand as compared to 3%
in India. The blame solely rests on our rulers and those who framed our economic policies,
for this sorry state of affairs. Indian retailers were kept under constant threat of free flow of
foreign investments at any time. No effort was made by the Government to motivate and
encourage retailers, who provide enormous employment, next only to Agriculture. Our

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

economic pundits have transformed the country into a testing ground for implementing their
varied economic school of thoughts.

As mentioned above, the scenario is fast changing. Indian retail trade sector comprising of
mostly family run businesses is gradually becoming modernized and organized. There are
now, a number of small and medium retail stores who have changed their retail formats by
opening up stores in spacious buildings with clean, hygienic and air-conditioned atmosphere.
Medium size retailers have opened up departmental and chain shops. Exclusive fruits and
vegetables shops have already sprung up in urban areas across the country, which sell variety
 of products including farm fresh vegetables and fruits. Proximity to actual consumer is
considered to be the prime requisite for successful functioning of retail outlets.

c. They will invariably source the products from local producers which in turn will spur
our Industrial and economic growth.

This is a misleading statement put-forth to justify their entry. With large market share, global
retailers will have large volumes of business enabling them to dictate terms to most suppliers
as these suppliers will heavily dependent on them. If local producers are unable to offer their
products at the rates offered by them, they will turn their head to the other side.

d. Farmers will stand to gain by direct purchase from them.

Absolutely incorrect.
They will initially buy the products directly from agriculturists at attractive prices through
their procurement centres on contract basis or otherwise. Once the agricultural mandis and
regulated market yards are closed and farmers losses their contacts, they will radically reduce
the procurement prices. As they possess tremendous bargaining power farmers will be forced
to sell their produce at cut throat prices and even will be forced to part with their agricultural
land which will render themselves merely employees of retail houses.

e. New job opportunities will be created.

Yet another fallacy. They may provide employment to few thousands new recruits but only at
heavy cost of displacement of crores of small retailers including self employed.

What the Union Government should do?

We seek following measures for accelerating the growth of organised retailing without unduly
impacting existing Small and Medium sized retailers:

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

1. Categorical policy statement should be announced by the Government immediately that

no big investment will be allowed in retail trade in India even as joint ventures with
Indian partners.

2. On the pattern of MSME (Micro, Small and Medium Enterprises) Act, we shall have an
Act to protect and promote small and medium retailers by name, Small and Medium
Retailers Act (SMR Act) under separate Ministry with innovative schemes such as
 Cluster approach to convert our unorganised retailers into organised modern retailers.
Even an individual shop can become a link of chain shops under cluster programme.
They should be provided with credit facilities at low interest rates. This will facilitate
number of retail units to come together and transform themselves into chain shops and
they will have the clout to bargain in purchase.
Formation of a National Commission to study the Retail Trade:
In the past years several studies were conducted by various Government and non-
Government Agencies on nature, size, problems etc. of the retail trade but it is observed
that each study report differs from another report resulting into a picture of confusion and chaos
about Indian Retail Trade. In order to understand the ground realities of retail trade, its strength,
size and possibilities of its structured development, we are of the firm view that as suggested by
Parliamentary Standing Committee headed by Dr. Murli Manohar Joshi, a National Commission
should be formed consisting of Senior Officials, Experts and representative of stakeholders.
b. Setting up of a Retail Regulatory Authority:
endorse the recommendation of said Parliamentary Committee for setting up of a Retail
Regulatory Authority to be headed by a retired Supreme Court Judge. The mandate of the
Authority should be very clear as to avoid any kind of ambiguity.
c. National Trade Policy for Retail Trade:
In the absence of any policy pertaining to retail trade, so far the retail trade has attained
growth on its own without any support from the Government. In the wake of globalization and
economic liberalization policy of the Government, India’s retail trade is facing serious
onslaughts from different quarters and needs a structured parameters for its growth and
development. The unorganized sector needs to be converted into organized sector and for
this purpose, a National Trade Policy for Retail trade and small & medium industries is
the need of the hour.
d. Banking Institutions :
The operations of Banking Activities in retail trade is a cause of major concern for the
retailers as Banks are unable to deliver satisfactory services to the retail trade.After
nationalization of Banks, marked deterioration in services is observed in comparison to service

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

being rendered by Foreign Banks operating in India. Functioning of Indian Banks is required to
be toned to match with standard of services given by Foreign Banks. Policy for grant of
loans to traders should be liberalized and cheaper rate of interest should be prescribed., taking
into consideration the factum that Foregin Banks are in competitive mode to offer lucrative
interest term even for purchases of vehicles etc. It is suggested that special procedure for credit
evaluation in case of application by traders should be laid down. The deposits made by family
members of traders should also be considered asequity while determining the Debt Equity Ratio.
Advances giving to traders should be considered as priority sector advances.
e. India to be a Free Trade Zone :
 At a time when there is scarcity of commodities especially of the nature catering to
requirements of daily necessity, there was justification to restrict movement of goods from one
state to another state. For the purpose, check posts and Barriers were put up. Road Permits
and Entry Forms were introduced to accompany goods while in transportation. In the present
scenario when situation has drastically changed to the extent that TINSYXS system has been
introduced and all articles are available in abundance in almost every state, free flow of inter-
state trade, should be ensured by abolition of all barriers in form of Entry Tax, Road
Permit, WAYBILL, etc making India a ‘Free Trade Zone’ leading to single common market. It
is necessary that the internal trade of the Country should get all encouragement and Protection
from the Government. The traders of the Country are dutifully paying taxes and want to
cooperate with Government in further widening of tax base and generation of more revenue.
f. Simplification and rationalization of tax structure:
The Retail trade is governed by multiple laws, rules and acts and most of them since
many decades old have lost their significance in the present business scenario. To overcome
genuine problems and to mitigate legitimate sufferings of traders, it will be in the fitness
of things if the Central and State Govts redress these maladies by taking the following concrete
steps :-
a) Constitute a ‘ REVIEW COMMISSION ‘ to scrap outdated Laws and
Regulations.
b) To suggest remedial measures and amendments which may be incorporated in
such laws, rules and regulations in consultation with Trade?
c) To examine feasibility of compilation of a single guidebook in concise form,
containing essential requirements of various laws as enacted by Central and State Governments,
as applicable to trade.
d) To examine fixation of accountability of officers and suggesting penal actions in
event of dereliction in duty / or high handed behavior.
It is also suggested, just as the advent of Lokpal is applicable to Union Government and
State Governments; the ‘ Lokpal’ system should also be made applicable to all Tax Departments

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

for ensuring transparency in the system. The above steps will not only eradicate nepotism and
corruption but at the same time will encourage traders to voluntarily comply with the provisions
of law.
g. Recovery Tribunal:
In order to ensure proper recovery of bank loans the govt. has constituted debts recovery
tribunal. The traders supply goods and services to industry, govt. and semi govt depts. There
money is blocked up with them for years. Under the existing judicial systems it takes
years to get their dues recovered through judicial process. It is suggested that an
independent recovery tribunal be constituted to recovered dues of traders.
 In case of Industries the sick units can take shelter of BIFR whereas in the case of traders,
no such mechanism exists. It is suggested that some kind of mechanism on the pattern of BIFR
should be evolved for Retail Trade.
h. Traders are Tax Collectors and not Tax Payers:
The trading community of the Country is collecting several taxes on behalf of the
Government and that too without any remuneration. Therefore classifying Traders as ‘tax payers’
is patently wrong and the trading community should be given a status of ‘ tax collectors” with
incidental facilities and expenses incurred in collecting such taxes may be reimbursed by the
Government.
i. Up gradation of retail trade :
In the wake of changing business scenario, the traditional retailing in India needs to be
upgraded and traders may be encouraged to adopt modern technology of business, adoption of
computerization etc. Therefore, a scheme should be evolved by the Government under
which traders may be educated for transform their business into modern outlook. The
cooperation of Trade Associations and Federations may be taken in this regard.
j. Social security for tax payers:
In order to enhance revenue and encourage voluntary compliance as also to promote a
policy of reward to honest tax payers, it is necessary to give them certain incentives. Therefore, a
scheme should be evolved to reward such tax payers and for that purpose a grading system can
be evolved consisting of different class of tax payers.
It has been seen that once the tax payer becomes incapable of earning or is unable to earn
sufficiently to sustain himself, his life becomes miserable. Therefore, a scheme of social security
should be evolved under which the Government should provide minimum sufficient funds for his
medical and monthly living expenses.
k Representation in Government Advisory Boards & Committees :
Despite yeomen services rendered by the trading community which is contributing more
than 50% to the national exchequer, it is observed that internal trade is not getting due

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

importance and protection from Central and State Governments which gives rise to a feeling
among traders that in spite of being an integral part of economy, it is being sadly neglected.
The formation of Board of Trade by the Government of India does not have a single
representative from trade and only industry people have been made as members, though it is
termed as ‘Board of Trade’. It is suggested that Advisory Committees be formed with Ministry
of Finance, Ministry of Commerce, Ministry of Industry, Ministry of Consumer Affairs and
proper representation be given to trade representatives. It is also urged that representation to
traders should also be given in the Economic Advisory Council of Hon’ble Prime Minister.
The trading in Commodity Exchanges has proved to be a fatal exercise for retail trade,
which has resulted into much speculative trading which in turn has given rise to inflation in the
Country. Merely speculative business not supported by any kind of actual delivery has led to
large scale of distortions. Therefore, it is suggested that the Regulatory Authority of
Commodity Exchanges should be made more effective by taking the representatives of trade as
its members and while defining the role of the Regulatory Authority similar on the pattern of
SEBI, the actual delivery concept for the deals materialized through commodity exchanges, must
be made mandatory.
The retail trade is a promising sector and if necessary efforts are designed to develop the retail
trade in a structured manner and within accepted parameters, it will earn more substantial
revenue to the Government and will be able to face any challenges whatsoever.

We trust that the above suggestions will meet with acceptance in order to refurbish and
reorganize the existing retail trade in a manner so that it can make significant contribution to the
national exchequer and also can withstand to any kind of global competition.

With the above reservations, we proceed further to express our question wise views on
issues for resolution mentioned in section-7 of discussion papers on FDI in multi-brand retail
trade.

Que 7(1) :- Should FDI in multi brand retail be permitted ? If so, should a cap on investment
be imposed ? If so, what should this cap be ?

Ans : After having an in depth study of the existing retail business in India and
considering its contribution to the society and ability to service its customers,
Confederation of All India Traders, expressing the voice of millions of traders of
country, is of the firm view that FDI in multi-brand retail should not be

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations )

permitted. In view of answer of first question being negative answering question of

putting cap on investment does not arise.

Que 7(2):- To develop the retail trade in food grains, other essential commodities and multi-
brand retail in general; should FDI be leveraged for creating back-end
infrastructure? To ensure that foreign investment makes a genuine contribution to
the development of infrastructure and logistics, should it be stipulated that a
percentage of the FDI coming in (say 50%) should be spend towards building up
of back end infrastructure, logistics or agro processing ?

Ans :- In India traders are capable of development of each and every kind of
infrastructure and logistics required for retail trade. The experience shows that
these FDI’s have control over cheap finances. They have capacity of arranging
 bulk finances from local capital market at cheap rate and indulge in large scale
hoarding. These companies start controlling the market since they are in control
of the entire food grains and essential commodities kept in their warehouses. The
existing retail trader is controlled through different legislations. The govt. policy,
both monetary and fiscal helps in controlling the prices and also anti hoarding
steps. Thus Confederation of All India Traders is of the firm view that FDI’s
should not be leveraged for creating back end infrastructure in food grains
and other essential commodities. They do not help in developing retail trade
but it will promotes hoarding.

Que 7(3):- It is necessary to encourage only genuine players in this sector and avoid a
situation where retail outlets are run through working capital support from
financial institutions. Should a minimum threshold limit for investment in
backend infrastructure logistics be fixed ? If so, what should this financial
threshold be ?

Ans :- In view of the observation mentioned in 7(3) above there is no need to permit FDI
even for investment in backend infrastructure logistics, so question of fixing
minimum thresh hold limit for investments do not arise.

Que 7(4) :- To develop our rural sector, should conditionality be put on the FDI funded chains
relating to employment ? For example, should we stipulate that at least 50% of the
jobs in the retail outlets should be reserved for the rural youth ?

Ans :- At present the govt. proposes to encourage rural youth to stay in its own village
and gets employment there only. The pressure of increasing population in metro

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

is also cause of concern with the govt. The discussion papers speaks about allowing FDI’s
initially in metros. How the stipulation of employing at least 50% of jobs for
rural youth will be monitored has not been specified. What will be definition to
rural youth is also not specified. The traders of country are of the view that
such conditions are being proposed only to justify entry of FDI in retail
sector. Thus the Confederation of All India Traders is of firm view that FDI
should not be allowed in retail trade.

Que 7(5):- Similarly, to develop our SME sector through local sourcing, should we stipulate
that a minimum percentage of manufactured products be sourced from the SME
sector in India ?
Ans :- FDI’s are known for arm twisting of their suppliers. It becomes practically
impossible to know who is owner of these chain. The sourcing parties are
different and supplier do not know from where to get money. This FDI’s are also
known to form several other companies through which they source material from
SME sector. Thus FDI indulge in all sought of mall practices. This statement is
based on the limited experience SME’s of India had by entry of corporate in retail
sector. Thus Confederation of All India Traders is of firm view that the
discussion papers are artificially trying the justify entry of FDI in multi-
brand retail trade under disguise of developing SME sector.

Que 7(6) :- How best can small retailers be integrated into the upgraded value chain? Can
they be provided access to the logistics/ supply chain set up by the FDI funded
retailers? Should it be stipulated that a minimum percentage of the latter’s sales
should be made to retailers through special wholesale windows?

Ans :- At the outset we would like to mention that Govt. should not allow
logistics/supply chain set up by FDI funded retailers. In the paras above we have
already mentioned that we do not agree to any proposal of FDI investment in
multi brand retail. So any question requiring answer in connection with allow
ability of FDI in retail trade and steps thereafter is not agreeable to Confederation
of All India Traders. It is necessary that small retailers should be integrated into
the upgraded value chain. In fact. in the existing system itself the smallest of the
retailers is linked to all the value additions. What is required is making him free
from unwanted inspector raj and availability of need based finance at international
rate of interest.

Que 7(7) :- As a part of a calibrated reform process, should foreign investment for such stores
be initially allowed only in cities with population of more than 10 lakhs (2001

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

census)? As there may be difficulties faced with regard to availability of real-

estate in such cities for setting up such ventures, should an area of 10 kms around
the municipal/urban agglomeration limits of such cities be included within the
definition of the city?

Ans :- We would like to reiterate that FDI in multi brand retail should not be allowed in
any form. Why do govt. want to relax condition for them is beyond our
imagination. The govt. instead of addressing difficulties faced by foreign
investors should concentrate on issues, problem and concerns of Indian traders.
The govt. should see what best can it do for Indian traders.
Que7(8) :- Will any of the conditionality mentioned above be inconsistent with our
commitments under the agreement on TRIM at WTO? If not, to ensure
national treatment, can such conditionality be extended to all retail chains in India
above a certain size? Will such extended conditionality be consistent with Article
301 of the Constitution?

Ans :- Under disguise of various treaties / agreement / commitments, the govt. should
not try to pressurize Indian citizen. Govt’s. foremost priority has to be to protect
and promote indian trade. The traditional Indian retail trade has to be protected
and maintained. If any progress / development in retain chain or retail business is
required to be done, the govt. should come forward and help Indian traders. Govt.
should not forget that the parliamentary committee has already made its
recommendations on FDI in retail trade. Due respect should be given to its
recommendations.

Que 7(9) :- What additional steps should be taken to protect small retailers? Should an
exclulsive legal and regularoty frame work be established to protect their
interests? Is a Shopping Mall Regulation Act required? Does this require
intervention at national level or should this be left to the State?

Ans :- The Indian retail traders are as it is under lot of pressure for compliances under
number of acts, rules and regulation framed by Central, State and Local govt.
Each regulation has its own inspector and compliances which is causing
frustration amongst retailers. If the govt. is really interested to take steps to
protect small retailers, Confederation of All India Trades demands that the govt.
should keep itself away from interferance in the matter of retailers. If there is no
intervention of Central and State Govt. in working of the retail trade our
confederation is confident that the Indian retail trades will boost further.

Que 7(10):- The present public distribution system provides a valuable safety net to vulnerable
sections of society. To ensure that the integrity of the PDS system is not
weakened and buffer stock is maintained at the desired level, should Governemt

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

reserve the right of first procurement for the part of the season or put in place a
mechanism to collect a certain amount of levy from private traders in case the
level of buffer stock falls below a certain level?

Ans :- It is necessary that Govt. should maintain buffer stock of all agro produce to
ensure supply of goods to all sections of society. Govt. should have right of first
procurement to maintain the buffer stock. The existing PDS system has to be
further strengthening by roping in more traditional retailers into its fold. The
 govt. should not start or put in place any mechanism to collect any amount of levy
from private traders under any condition.

Que 7(11):- How should compliance be ensured with the above stipulations? Should a
centralize agency, to be nominated by the State Govt. concerned, be empowered
to grant permissions to every outlet to be opened? The onus of providing
compliance with these conditions could rest with the concerned retail chain. The
chains could submit an annual statement to such State Govt. agency providing
proof of compliance. Should this agency be empowered to monitor compliance of
the present cash and carry outlets too?

Ans :- The traders of India do not want entry of FDI funded retail chain. Thus there is
no question of having any Centralize agency for monitoring or granting
permission to any of the outlet. The existing system of administration by
local govt. of all the retail outlet should continue.

Que 7(12) :- The penalty for non compliance could include cancellation of approvals as well as
denial of future permissions for such activities. What additional penalties could
be levied? Should civil penalities be imposed? Or criminal? Or both

Ans :- The question framed itself shows that there is a mind setup to allow FDI in retail
chain. Accordingly the answers are being sought. Worldwide it is known that
these corporate entities are in habit of flouting rules and regulation. Thus this
confederation maintains that permission to FDI in multi-brand retail should not be
allowed.

It is humble submission that the retail of Joint Parliamentary Committee table on both the
houses of parliament on 8th June 2009 shuld be debated and the recommendation made on retail
trade in India should be accepted. No other forum should be allowed to discuss this subject since
the matter is pending before both houses of parliament.

CONFEDERATION OF ALL INDIA TRADERS

Vyapar Bhawan, 925/1 Naiwala, Karolbagh, NewDelhi.
(An apex body of All Trade Associations & Federations)

We trust that the above suggestions will meet with acceptance in order to refurbish and
reorganize the existing retail trade in a manner so that it can make significant contribution to the
national exchequer and also can withstand to any kind of global competition.
Thanking you.

Truly your’s

B. C. Bhartia Praveen Khandelwal

National President National Secretary General