The Hindu Business Line : FDI entry in retail will not displace `mom and pop' shops: Kamal Nath

The question was whether the conventional street-corner outfits would be able to handle the technology challenges of cold chains, packaging or logistics.

Bangalore , July 1

A NEW format is being worked out to ensure that any FDI entry in the retail sector will not kill the old order of `mom and pop' shops, the Union Commerce Minister, Mr Kamal Nath, assured here on Friday.

"Whatever the Government does, we do not want to replace or displace the existing retail sector... We are not going to touch `mom and pop shops'," Mr Kamal Nath said during interactions at a meeting organised by the Bangalore Chamber of Industry and Commerce and the Federation of Karnataka Chambers of Commerce and Industry.

Suggestions have been sought pending a decision on foreign investment in the retail sector.

The new model in the making, he said, would be in place "as soon as we are able to have one."

It would "securitise existing traders" and at the same time would also look at getting a fair deal for the consumer and the agriculturist.

While the retail sector was galloping at 22 per cent annually, 98 per cent of the trade was in the unorganised sector, with no capital investment.

The question was whether the conventional street-corner outfits would be able to handle the technology challenges of cold chains, packaging or logistics. Any decision of the retail sector FDI would ultimately benefit the farm sector by getting good and steady price for its produce.

On the World Trade Organisation, the Minister said the non-tariff barrier (NTB) issue would be taken up "very strongly" at the next round at Doha to protect the domestic industry. NTBs ranging from packaging demands and pension laws were being set by the developed world to arm-twist the third world.

However, neither India nor the developing countries would give it any quarter on financial services or farm market access.

"With all the subsidies the developed countries give to agriculture, we will not give access. In India it is subsistence agriculture and not commerce, the way it is in the developed countries. Farm subsidies in OECD countries amount to a billion dollars a day. Our agriculture base will not be able to sustain such forays."

SMEs were the bedrock of Indian industry and the Government would tackle the WTO on the strength of its manufacturing sector.

Highlighting the importance of regional blocs in sustaining a global market share, Mr Kamal Nath said the Government would pursue regional cooperation as strongly as it did global economic ties.

"The economic cooperation with Singapore is a move in this direction. We see Singapore as an investment hub and a gateway to Asean," he said.

The Government was serious about passing the amended Patent Bill.

The Minister agreed that a patents office should be set up in Bangalore to help innovators and entrepreneurs. Currently, the Chennai Patents Office takes care of the entire South.

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