‘Consumers, suppliers should gain from retail sector policy’

The Hindu Business Line, December 05, 2006

Despite the Union Government’s decision to go slow on allowing foreign direct investment in the retail sector, it continues to be in the news with the entry of bigwigs such as Reliance and the Bharti-Wal-Mart tie-up.

Keeping the rapid growth of the retail sector in mind, CUTS International, a research and advocacy group, has asked the Centre to adopt a proper policy and regulatory framework for the sector, which can ensure that competition in the retail arena benefits both consumers and suppliers.

Study results

“Our studies across rich and poor countries have shown that wherever big retail or supermarket chains operate, both consumers and producers get the short end of the stick, in the absence of proper regulation,” said the CUTS Secretary General, Mr Pradeep S. Mehta, in an official release here.


The moot point is that the sector is going to grow even if there are concerns about the small traders being adversely affected. Small traders have some advantages though, like being conveniently located since large sections of the Indian population cannot afford to visit the large stores, he added.

“However, there has to be enough competition in the retail sector, not only to give a better deal to the consumers, but also, and probably more importantly, to protect the small and medium producers from the monopolistic anti-competitive practices of the giant retailers,” said Mr Mehta.

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