Protests across India over supermarket competition

'Multinational companies will destroy the economic and social fabric of the country'

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Protests are taking place across India today over proposed government reforms to the retail sector that would allow international supermarket giants such as Tesco (LSE: TSCO.L - news) and Wal-Mart to set up shop in the country.

A strike has been called by the opposition Bharatiya Janata Party, as well as communist parties, which will see schools, public transport and many independent businesses shut down for the day.

Thousands of kirana, owners of small independent supermarkets, also plan to close their shops to protest against the government's decision to allow foreign stores to enter the market.

Many large international chains already have shops in the country, but are only allowed to sell to smaller shopkeepers, not directly to consumers. The ruling Congress party's controversial plan would allow them to compete for market share with existing retailers in an attempt to attract further foreign investment and boost the economy.

In reaction to the protests and strike the party has stood firm and refused to reverse the decision, but has suggested that it could compromise by rolling-back recent increases in the price of diesel.

The Trinamool Congress party, on which the ruling party depends for its majority, has threatened to withdraw its support over the decision. The leader of the party, 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."

An independent shopkeeper named Goel from Delhi's Bengali Market told Reuters: "If these big guys storm in and wreck what I've fostered for decades, then my family and I will have to resort to a different business."

Praveen Khandelwal, head of The Confederation of All India Traders, which represents kirana, told AFP that 50m people would take part in today's action. He said: "Multinational companies will destroy the economic and social fabric of the country and will adversely impact traders, transporters, farmers and other sections of retail trade."

Workers have already disrupted train services in Uttar Pradesh and Bihar in protest at the retail reforms, as well as rising diesel prices. Crowds carrying flags blocked trains by standing on the tracks and burning effigies representing the government.