Metro wants to introduce more efficient distribution methods
Hundreds of shopkeepers and traders in the southern Indian city of Bangalore began an indefinite strike on Monday to protest against the launch of a wholesale outlet owned by the German retail giant Metro Cash and Carry (MCC).
The Bangalore store is the first of the many planned launches across India by the $60bn ($36bn) Metro group.
The traders downed shutters at the main market area and demanded Metro's licence is cancelled by the government because they are concerned that the world's fifth largest retailer will have a too powerful position in the market.
Police provided security for Monday's inauguration of the outlet, said to be one of the biggest retail shops in India.
The traders' protest has the support of the Swadesi Jagran Manch, an organisation that is fighting against opening up of the Indian economy to multinational corporations.
Metro, which has invested more than $40m in the Bangalore outlet, is accused of bringing down prices to capture the retail market.
But Harsh Bahadur, managing director of Metro's Indian arm, said the pricing was part of its superior business model.
The traditional way of distribution in India involves a lengthy chain of individuals and small traders before a product has travelled all the way from factory to customer.
Metro wants to introduce more efficient distribution methods.
Mr Bahadur said the company was not violating any laws of the land and was ready for discussions with the traders to clear any misgivings.
Metro insists it will complement and benefit existing trade structures and small retailers, rather than undermine them.
"We are firmly convinced that this concept will be successful in India and useful for the country, all the more so as it contributes to support the domestic economy, " said Metro chairman and chief executive Hans-Joachim Koerber.
The German group plans to open a second centre in Bangalore.