News: Wal-Mart shown the red light in Bengal

(HT 02/01/2007) Kolkata - US retail giant cannot set shop in West Bengal, the CPM Central Commitee decided on Tuesday.

This stand of the Central Committee, which is meeting in the city, is in line with the politburo statement issued on November 2006, where it opposed the deal between Wal-Mart and Bharti Enterprises. The party believes that the deal is, in effect, a backdoor entry of foreign direct investment in retail trade.

The Central Committee stand puts to an end speculation about Wal-Mart retail chains in the CPI(M)-ruled states of West Bengal, Kerala and Tripura.

The politburo had already said that FDI in retail trade was not permissible under the existing policy on foreign investment in India. "The Wal-Mart's franchisee agreement with Bharti Enterprises is an attempt to circumvent the existing policy regulations in order to gain a foothold in the Indian market," the politburo had said.

The Central Committee reiterated that the entry of MNCs in the retail trade would lead to massive displacement of unorganised retailers and seriously affect farmers and domestic manufacturers.

"Expansion of Wal-Mart retail chains has led to closure of small stores and affected poor communities in the United States. Given the scale of unemployment in West Bengal and the rest of the country, this is something we can avoid. On the contrary, there is a need for a strong regulatory framework to protect the domestic retail sector," said a Central Committee member.

The Central Committee’s stand is also a clear message to Chief Minister Buddhadeb Bhattacharjee, who has already allowed German wholesale major Metro AG to set up operations in the state.

It is learnt that Wal-Mart officials had earlier met the chief minister at Writers' Building, seeking his help in establish operations in Bengal. But so far, Bhattacharjee had refused to give Wal-Mart the nod.

Buddha clarified that he had no problems with German retail major Metro AG because though they would operate in Bengal, there would be no retail trade. They have told the chief minister that they would be only involved in the wholesale business and sell their products to the hotels.