The proposal to permit FDI in multi- brand

retail could spell doom for consumers and

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traders as foreign investors

will dry up existing supply chains and then jack up prices to exploit

the situation to their benefit, according to a top official of a traders' body.

"Consumers and traders will be at the receiving end if the UPA

decides to introduce FDI in the retail sector. The international

traders never face genuine competition in the market, but follow

a policy of concentration of goods and dominance in the market,"

said B C Bhartia, the National President of the Confederation of

All India Traders (CAIT).

"These FDI investors will put in a lot of money and also spend

huge money. Obviously their expectations will be high. They jack

up prices of commodities instead of selling goods at comparative

rates and virtually compel consumers to take more quantity of goods

and also compromise on quality," he told PTI.

With full control over the supply chain, FDI investors will

dry up the existing sources on which traders are fully dependent

and exploit the situation to their benefit to earn profits. Since

FDI investors have a huge financial loss-bearing capacity, they will

virtually make the local traders run for money, Bhartia -- a professional

Chartered Accountant with a background of family business in trading -- said.

To a query on states exercising options not to accept FDI, Bhartia

said FDI investors are known for acquisitions and mergers.

"They will in due course take over companies having operations

or a market presence in multi-states. By this route, they will automatically

reach the 'no entry zones' or states not interested in FDI in the

retail sector," he said.