New Delhi (Sputnik) — A Hindu nationalist outfit, considered to be a strong influence in policy decisions of the current Bharatiya Janta Party-led government in India, has strongly condemned the government's decision to allow 100 percent Foreign Direct Investment in single-brand retail. The Swadeshi Jagaran Manch (SJM) — an affiliate of the Rashtriya Swayamsewak Sangh (RSS), which is also considered the parent organization of the ruling BJP, says the move is against the interest of the nation.
"More worrisome is the decision to set off the condition of mandatory sourcing requirement of 30% of purchases from India, for 5 years after the opening of the first store by the foreign company. As a result of this decision foreign companies would get the freedom of procuring the products from anywhere on the globe. This would go against the interests of the domestic manufacturing and also would discourage the future investment in manufacturing in India and therefore would go against the own declared policy of the government of encouraging ‘Make in India'," Ashwani Mahajan, All India Co-convener, SJM told Sputnik.
In a meeting of the Indian cabinet led by Prime Minister Narendra Modi earlier this week, it was decided to liberalize foreign direct investment (FDI) norms in six major sectors, including single brand retail — a move that could benefit companies like Apple of the US, Swedish furniture retailer IKEA and fashion house Hennes and Mauritz AB (H&M).
According to the previous rule, any foreign company could open single-brand stores in India, but it would have to source 30% of its product from the Indian market — meaning it had to carry out about least one-third of its production activity in India. This rule was not seen in consonance with the interest of foreign retailers. Under the tweaked norms, the 30% local sourcing clause remains, but it has been relaxed to the extent that the companies can meet the mandatory 30 percent local sourcing incrementally within a period of five years of opening their first store in India, which would allow companies to start their retail outlets first, and slowly ramp up production in the region.
It is this tweaking that has caught the attention of the SJM.
"At present domestic manufacturing is in serious problem due to lack of new investment in manufacturing in the country," the SJM convener added.
The SJM has been a major force behind the reversal of several government decisions in the recent past, including the plan to shelve the introduction of the cervical cancer vaccine HPV in India. In a strongly worded letter to the Prime Minister, the outfit requested him to stop the introduction of the HPV vaccine.
"Swadeshi Jagran Manch requests you to stop this move to introduce the HPV vaccine in India and we recommend the strongest action against groups that pervert science, which brings ignominy to the scientific community in the country and sells the country to vested interests," the letter had said.