Hyderabad: Small shopkeepers and traders in TS and AP are raising their voice against the entry of global retail giants and demanding that the Centre scrap the $16-billion Walmart-Flipkart deal.
Small shops generate self-employment for lakhs of families. Allowing 100 per cent FDI in retail will push them out of business, the Hyderabad Kirana Merchants’ Association said.
Walmart claims it is helping small shops modernise and adopt new business models.
“We demand a proper e-commerce policy. The state government should support us by taking up the issue with the Centre. Their (global retail giants) purchasing power is huge and they get more discounts. This makes a lot of difference in margins. Small kirana shop owners can’t compete with global retail giants,” said association president Laxminarayan Rathi
“Allowing 100 per cent FDI in retail will kill the small retailing segment. Crores of families will be pushed out of business. The government should encourage small traders considering it as a self-employment avenue,” Mr Rathi said.
The association’s demands include formation of an e-commerce policy, setting up an authority for e-commerce, scrapping the Walmart-Flipkart deal and scrutiny of the deal by Competition Commission of India. The Centre had recently clarified that it will come out with a framework on e-commerce by October.
Mr Rajneesh Kumar, chief corporate affairs officer, Walmart India, said: “Walmart Foundation is investing nearly $2 million in the Farmer Market Readiness Programme in India. We have been contributing to the Indian economy for many years now. Through our B2B business (wholesale cash-and-carry) in India, we are not only supporting lakhs of small kirana merchants to succeed, but we are also helping them modernise.”
He said their continued efforts were to support domestic manufacturing in India by sourcing locally from SME suppliers, small farmers and women-owned businesses. “A clear testament is that 95 per cent of our merchandise comes from local farmers and SMEs,” he said.
The kirana association observes that almost all merchants are deprived of institutional lending as banks do not finance their business requirements.
Change is inevitable and business is no exception to this, believes Mr Ravindra Modi, former president, The Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry (FTAPCCI).
He said, “I don’t think there will be immediate adverse impact on small kirana stores as organised retail is just below five per cent. It’s a similar situation in textiles, food and other retail segments.”
Mr Ramesh Gupta, a kirana shop owner at Dilsukhnagar, was not worried about the entry of retail giants, because, he said, consumers may not buy everything at big supermarkets.
“We sell below MRP, but supermarkets can’t offer that price. We also sell groceries on credit and consumers may not get goods on credit at supermarkets,” Mr Gupta said.
He said sales had fallen drastically in the early days of demonetisation. “It took some time for us to recoup. We upgraded to online transactions and accepted card payments. This helped us improve sales. Whenever a shortage of currency arises, consumers come to us because we give them credit. This helps build a strong bond with customers,” he said.
The Confederation of All India Traders (CAIT), which represents over 10 lakh traders, has said that at a time when there is no policy for e-commerce, Walmart’s acquisition of Flipkart would be a cakewalk for the US retail giant to circumvent the FDI policy. The traders body has filed its objections with the Competition Commission of India and has said it will move the court if need be.
According to industry projections, retail may get 30 per cent of the market by 2025 from the present five per cent of the total $670 billion domestic retail space.
