Even as traders and political parties across the country step up their campaign against against foreign direct investment (FDI) in multi-brand retail, the department of industrial policy and promotion (DIPP) said small and unorganised retailers need not fear about predatory pricing and unfair competition.
Senior officials in the department said with global giants entering the market, monopoly and competition would not be a threat because India has strict laws to tackle them.
?Predatory pricing is not any more a concern because the the Competition Commission is there to enforce rules against collusion and predatory pricing,? an official said.
Though the ministry of commerce and industry had assured that national treatment is a commitment in international investments, traders fear monopolization of the domestic market by international retail giants.
According to the Confederation of All India Traders, once the sector is opened to foreign investors they will have to be given national treatment under different bilateral treaties.
National treatment implies that domestic and foreign investors are treated equally.
?The FDI policy itself envisages unequal treatment in a range of sectors embodied in the sectoral caps and security restrictions. This means, for example, that while an Indian investor can invest 100% in multi-brand retail trading in India, a foreign investor will still be allowed to invest only 51%,? A ministry official said.
?Further, all the attendant conditions of the policy have only to be complied with by the foreign investor and not an Indian investor setting up a multi-brand store without foreign investment.?
There is a policy recommendation to strengthen the Competition Commission?s role for enforcing rules against collusion and predatory pricing.