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Last year the government of India announced it would move ahead with FDI in multibrand retail but was forced to back down in the face of widespread opposition. The government is now seeking consensus from stakeholders to push through the move which would open the doorway for multinationals including Walmart..



After meeting with India's Ministry of Commerce and Industry’s Department of Industrial Policy and Promotion (DIPP) last week, Christy Hoffman, the Deputy General of UNI Global Union said, “It is important to share the experiences of workers and their communities from around the world who have first hand knowledge of the effects of multinationals entering their retail markets. We appreciate that the ministry has taken the time to hear our concerns and trust that they will take them into consideration when they assess the interests of all stakeholders. This is India’s decision alone and it must do the best for its citizens. But our advice is simple: Proceed, if at all, with caution.”



UNI presented a report to DIPP which exposed Walmart’s appalling track record on labour rights, its impact on jobs in the retail industry, and on producers in the supply chain. The report is informed by the experiences of UNI affiliates and in particular the United Food and Commercial Workers Union (UFCW) from North America.



Hoffman added, “Walmart’s motto is ‘low prices everyday.’ But these low prices come at a great cost to the workers both in the stores and in the supply chain. From the farm to the factory to the cashier, there are consequences of Walmart’s business model which should be made clear to the Indian decision makers.”



Ian Campbell, Assistant Research Director at the UFCW pointed out that, “The jobs equation based on the Walmart model may not be positive for India. If the experience of other countries holds true, job growth in retail is likely to be less with Walmart than without it. And in the long run India stands to lose jobs among those in the supply chain as Walmart pushes prices paid to farmers and manufacturers down rather than raising them with those unable to accept such concession left with no option other than to close up shop.”



As UNI explained to the ministry, Walmart has consistently shown hostility to unions unless it operates in a highly regulated environment where union recognition is the norm or required. UNI has asked that India require that retail operators in the organized sector recognize unions and that the government create a National Wage Board for tripartite bargaining.



UNI also stressed that other conditions already under consideration should be strengthened, and that any conditions imposed should be enforceable, not evaluated through self-monitoring. The pace, scale and access to cities should be carefully managed. Local sourcing requirements should be increased and carefully developed to insure that Indian producers are employed in the process.



UNI warned that, if Walmart is an employer in this industry, India should not expect it to lead in industry standards. Instead, it is likely to pay the absolute minimum and only when the rules are carefully enforced. India has a chance to reverse this trend and create a more level playing field by ensuring that the workers have representation and bargaining.





Small businesses, whether kiranas or small stores, will not be able to survive the price competition without proper protection. In one town after another in the United States, small business has not survived Walmart’s entry into the market and the doors have closed. The location of these stores in India must be carefully considered to limit any impact on existing stores and kiranas.





Read the Executive Summary of the Report: Walmart's Global Track Record and the Implication for FDI in Multi-Brand Retail by clicking on the tab "Related Files" at the top of the page



Press Coverage:



Reuters:

http://www.reuters.com/article/2012/02/03/uni-global-fdi-idUSL4E8D33RI20120203



The Hindu Businessline :http://www.thehindubusinessline.com/industry-and-economy/marketing/article2866339.ece?homepage=true&ref=wl_home



Ebizepand:

http://www.ebizexpand.com/2012/02/was-india-right-in-not-allowing-fdi-in-its-450-billion-retail/



Goldenrchronicles:

http://goldenchronicles.wordpress.com/2012/02/06/uni-global-union-cautions-walmarts-entry-into-india/