-The Times of India
The Delhi high court on Wednesday sought replies from the Centre, Bharti Walmart Private Limited and Bharti Retail Limited on a plea for a probe against the firms for allegedly carrying out retail trading in multi-brand sector in violation of India's FDI policy.
A bench of acting Chief Justice AK Sikri and Justice Anil Kumar issued notices to the Centre and the firms on a PIL filed by scientist and environmental activist Vandana Shiva.
The PIL alleged that Bharti Walmart was illegally carrying out multi-brand retail trade despite being permitted only to carry out wholesale cash-and-carry trade in India. In cash-and-carry trade, goods are sold from a wholesale warehouse and customers settle the invoice on the spot in cash and carry the goods.
Senior lawyer Pinky Anand, appearing for Shiva, alleged that many established Indian companies were acting as "front" for foreign firms to give their offshore partners a "majority control and economic interest" in retail sector.
"This instant case seeks to expose how many established Indian companies are actually fronting for foreign trading companies that have partnered with them for setting up companies in India for the purpose of carrying on trade, so as to give the foreign partner majority control and economic interest in the Indian retail sector, thereby circumventing the FDI prohibition of multi-product trading in the retail sector," the PIL said.
The retail giants are depriving Indian small traders of their "solitary source of livelihood", it said, adding that the activities of foreign companies "adversely affecting the multi-brand retailing scenario" here and causing problems to lakhs of people in organized and un-organized sector.
The PIL said protests had prevented Walmart's entry into the retail sector but in 2007, it got a "backdoor entry" for wholesale trade through a joint-venture with Bharti. It added that the stores were opened "by the names of Easyday and Best Price Modern Wholesale".
The petition, referring to a response received under RTI, said the department of industrial policy and promotion had not granted any licence to Bharti or Walmart or any other company to set up Easyday stores in India.
"Union of India permitted foreign direct investment only in the cash-and-carry wholesale sector in India, without implementing appropriate checks to ensure that such companies are not able to intrude the multi-brand retail sector," it said.
Walmart entered into a joint venture with Bharti Enterprises in 2007 for carrying out cash-and-carry wholesale trade in India, it said.