The controversy in India over the government's policy to allow foreign direct investment (FDI) in its retail sector and open the door for giant multinationals like Walmart, Tesco and Carrefour is a clear reminder that the benefits of globalism also come with major drawbacks. Many large multinationals already operate in the country, but they are only allowed to sell to smaller shopkeepers, not directly to consumers. The ruling party's controversial plan would allow them to compete with local retailers in an attempt to attract further foreign investment and boost the economy.
Protests against the policy, supported by the opposition Bharatiya Janata Party and the Communist Party of India (Marxist) (CPM), caused disruptions in major cities last week, as well as delays in train services in Uttar Pradesh and Bihar. Those opposing retail FDI are promising widespread strikes if the government doesn't back down.
Also putting pressure on Prime Minister Manmohan Singh to reverse course was the withdrawal on Friday of the Trinamool Congress from the ruling coalition, United Progressive Alliance, over the decision to allow direct overseas investment, as well as other controversial economic reforms. Trinamool Congress leader Mamata Banerjee, said: ''We are not in any way going to accept the decision to allow foreign direct investment in multibrand retail. We will continue protesting FDI in retail no matter what the consequences.''
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