Millions of independent retailers have ceased trading in the Indian state of Maharashtra is response to government moves to ease restrictions on Foreign Direct Investment (FDI) in multi-brand retail.

According to a report by the Gulf News, over 3.5m small to medium-sized retail operations shut up shop in the state, including its main wholesale market for grains, fruit, and vegetables.

Traders fear they would be left jobless if the government opens up multi-brand retail to foreign companies such as Walmart and Carrefour.

Currently 100 per cent FDI is only allowed in wholesale operations, while 51 per cent FDI is allowed in single-brand retail.

'The UPA government will have to withdraw its decision as we don't want FDI in retail,' said Mohan Gurnani, president of the Federation of Associations of Maharashtra.

'A government that does not think about its people should be pulled down,” he said, adding that traders would begin a hunger strike tomorrow (Saturday). 'This is a question of our existence,' he said.

Viren Shah, who heads the Federation of Retail Traders' Welfare Association in Mumbai told the newspaper the response from independent retailers had been swift and widespread.

'Why is the government not thinking of protecting the 200m small traders across the country. FDI in retail will certainly wipe out their livelihood and will only benefit big Indian corporates and a few people in the government,' he added.

In response to the government’s argument foreign retailers would bring much needed back-end investment to a fragmented sector choking with inefficiencies, Shah said infrastructure should be provided by the government and large Indian corporations.

“Isn’t the Indian government and Indian corporations not capable of building warehouses and cold storages. This is like begging,” he said adding that foreign retailers would ruin the Indian economy.