FDI policy violation: HC notice to Centre, pvt firms

New Delhi: 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 interst 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.