The American retail giant Wal-Mart has announced that it will build wholesale outlets in India in collaboration with an Indian partner.  Anjana Pasricha reports from New Delhi that the arrival of large retailers like Wal-Mart is being opposed by small shopkeepers, who dominate the country's retail sector.    

Indian activists hold anti Wal-mart placards at a protest in New Delhi, India, 22 Feb. 2007 (file photo)

But both men are worried. They say the flow of customers is steadily diminishing. 

Their customers are heading instead to the city's newly opened supermarkets. People like Neema Eidnani, 45, say they enjoy the convenience of shopping under a single roof for vegetables, groceries and other items.

"The atmosphere is cleaner, there is air-conditioning, and everything is packaged well, and prices are as competitive," she said.

Millions of affluent, middle-class customers like Eidnani have prompted the U.S.-based retail giant, Wal-Mart, to try to gain a foothold in the $300 billion Indian retail market.

Wal-Mart announced recently that it would build 15 large wholesale outlets over the next seven years in partnership with the Indian group Bharti Enterprises. The first outlet will open next year.

Wal-Mart is entering as a wholesaler, because Indian law does not allow multi-brand foreign retailers to sell directly to consumers.

Still, the arrival of retail giants like Wal-Mart is unnerving to the estimated 12 million mom-and-pop stores and the tens of thousands of hawkers who traditionally dominate the retail sector in India. 

Just days after Wal-Mart announced plans, an alliance of left-wing groups, trade unions and small shop owners launched a countrywide protest movement.  The movement's aim is to keep the large multinational retailers out of India.

In a rally held in a bustling New Delhi market recently, hundreds of protesters carried signs such as "Go home Wal-Mart."  They burnt an effigy of a demon inscribed with names of international supermarket groups.

Activist Vandana Shiva is on the frontline of these protests. She says the multinationals threaten the livelihoods of millions of people in India.

"They will do extra damage in India, because we have such a large population involved in retail," she said.  "Forty million people directly, a 100 million people backing them up through loading, cleaning, packing etc.  This is about destroying livelihoods, not creating employment."

Wal-Mart is trying to allay such fears. The head of the company in India, Raj Jain, says their cash-and-carry outlets will create more business, as they will sell locally produced goods to Indian retailers.            

"On the supply side, we will source 90 percent of all our products from local manufacturers and farmers, helping them improve quality [and] productivity as well as providing direct linkage to business customers," he noted.

But such assurances have not persuaded the hawkers and small-scale retailers.  The protests continue.

India's retail sector is an attractive one.  It is growing at an estimated 20 percent a year, and many Indian companies have already made large investments in order to grab a piece of the expanding business.