Indian traders protest foreign retail chains

India's biggest traders' association held a series of demonstrations Tuesday against proposals to allow supermarket chains like Wal-Mart and Tesco into the country's retail sector. The Confederation of All India Traders (CAIT) organised protests in several cities, including the capital New Delhi where about 150 shopkeepers voiced anger about proposed changes to foreign direct investment regulations in India. Multi-brand foreign groups such as US-based Wal-Mart currently operate as wholesalers, but cannot sell directly to the public amid fears that they could swamp small, traditional, family-run stores. Suresh Bindal, president of the Mercantile Association of Wholesale Textile Traders, led the demonstration in Delhi, telling AFP that "foreign retail chains will turn us into their servants if we don't stop them". "First the international companies will sell to consumers at a cheaper rate, and crush small shopkeepers, then they raise prices. They will turn independent traders into suppliers to multinational companies," he added. India's tight foreign investment rules are aimed at protecting small "mom-and-pop" stores in the retail sector. Fewer than 10 percent of consumers in India shop in bigger, local department stores. Large foreign retailers have urged India to open the consumer market to foreign chains as they seek to grow outside saturated Western markets. Some analysts say the chains could help solve India's chronic food distribution problems, bringing in modern refrigeration and storage facilities that would help reduce waste. The government is yet to decide whether to loosen the FDI laws, but a high-powered panel called the Committee of Secretaries approved the idea last week. The panel recommended, however, that investors put in at least $100 million to set up multi-brand retail stores and only operate in cities with at least one million people. India has already allowed 51 percent foreign investment in single-brand retail operations such as Nokia or Reebok and 100 percent in wholesale cash-and-carry operations.