BRITAIN’S most prominent Asian MP last night sounded a note of warning about making major changes to the food retail environment in India.
Last week, the Indian government announced it was going to relax rules over the entry of foreign supermarkets into the country and allow chains such as Tesco, Walmart and Carrefour to trade there. At present, foreign companies are not permitted to run multi-brand stores.
The move has prompted a huge uproar in the country with a one coalition partner of the Congress led government under Dr Manmohan Singh even threatening to pull out.
There are huge concerns about the fate of mom and pop stores which dominate the Indian food retail market and politicians have been careful not to antagonise these or farmer groups which could also be affected.
Keith Vaz the MP for Leicester East, speaking at a special dinner hosted by the Indian Journalists' Association (IJA) on Wednesday evening (19), told the audience: “Please be careful, modernise but do not hand over your retail sector.”
The chairman of the powerful home affairs committee urged Indian lawmakers to put in tough planning regulations to prevent the supermarkets from wiping out independently run stores.
“If there isn’t a degree of regulation, it is going to change the way Indians do their shopping,” he said.
He revealed how he and others had fought a battle in his constituency to stop a Tesco Express from setting up in Belgrave Road, a popular Asian shopping area, made up of many retail outlets run by Asian families. They had lost the battle on appeal.
Vaz prefaced his remarks but saying he could only give a personal opinion as he answered several questions at the event at The Bistro, The Crowne Plaza in Victoria, London.
The dinner was held in commemoration of Vaz’s 25 years in parliament.
IJA president Amit Roy praised Vaz for his huge contribution to the Asian community and gently teased him about being the member for “Bollywood Central” because of the high number of film stars he has invited to Leicester.
A battle has raged for more than two years in India over the entry of foreign supermarkets into India with supporters arguing that foreign investment will lead to more efficient methods of production and distribution. It is estimated that some 40 per cent produce is lost simply because it is not well maintained and perishes.
Opponents claim the supermarkets will lead to a decimation of the independent retail food market as the big foreign chains flex their spending power. Even Indian companies such as Reliance have seen supermarket stores attacked.
Tesco, Walmart and Carrefour all already have joint operations with Indian partners but currently only in the cash and carry sector.
