The Delhi High Court today sought replies of 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 existing FDI policy.
A bench of Acting Chief Justice A K Sikri and Justice Anil Kumar,who demitted office today,issued notices to the Centre and the firms on a public interest litigation (PIL) petition,filed by scientist and environmental activist Vandana Shiva.
The PIL alleged Bharti Walmart was illegally carrying out multi-brand retail trade despite being permitted only to carry out wholesale cash-and-carry trade here.
Cash-and-carry trade is a form of trade in which goods are sold from a wholesale warehouse and customers settle the invoice on the spot in cash and carry the goods away with themselves.
Senior lawyer Pinky Anand,appearing for Shiva,alleged many established Indian companies are acting as “front” for foreign firms to give their offshore partners a “majority control and economic interest” in retail sector here.
“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.
Earlier,protests had prevented Walmart’s entry into retail sector here,but in 2007,it did get a “backdoor entry” for whole sale through a joint-venture with Bharti,the PIL said adding that the stores have been opened up “by the names of Easyday and Best Price Modern Wholesale.”
The petition,referring to a response received under the RTI,said the Department of Industrial Policy and Promotion has not granted any license to Bharti nor Walmart nor 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 in a joint venture with Bharti Enterprises in 2007 for carrying out cash and carry wholesale trade in India,it said.