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UNI Global Union says the Indian government has needlessly relented to the pressure from Walmart to relax its its rules on Foreign Direct Investment while missing the opportunity to strengthen protection for workers and the communities. The government announced changes this week which are widely seen as a response to demands from multinationals such as the American retail giant to make it easier to expand into the country.



The new policies will see a relaxation of rules governing the sourcing of products, infrastructure investment and the cities in which foreign companies can operate in. In addition to the changes in the retail sector, India’s cabinet also approved the relaxation of FDI rules in petroleum, natural gas, power, stock exchanges, telecom and defence sectors.



In a letter to the Commerce Minister earlier this week, UNI weighed in against the proposed changes as needless efforts to water down a policy which already opens the door for Walmart. In addition, the letter urged that - if the government planned to make changes in the rules- it should also strengthen them in key areas, such as through additional protections for the right of workers to organise in the sector and by adding an enforcement mechanism to the FDI program.



The letter cited Walmart’s history of abuse of its workers in the United States and elsewhere, as well as its unsustainable business model that hurts smaller businesses. It warned the Indian government that Walmart has had a negative impact on both retail wages and employment in areas in which it operates.



UNI Global Union General Secretary Philip Jennings said:



“Let’s be clear here, the Indian government should not be held hostage to the demands of Walmart to make it easier to enter India.



"The Indian retail market is critical for Walmart's global expansion. As we have said many times, India should proceed with caution before opening its doors to the likes of Walmart. We’ve seen what Walmart are capable of elsewhere – they are anti union, they deny their workers a voice at their own place of work and we do not want to see this model exported to India. And allowing Walmart to "self monitor" is like having the fox in the hen house."



The previously announced rule stated that foreign chains must source 30 per cent of their products locally. In the new announcement, the government retained the 30 per cent sourcing requirement but said it can be met over a period of five years initially and after that it has to be met on an annual basis. The new rule also expands the number of cities open for FDI and softens the requirement for back-end investment.