FDI in retail: Time India removed its blinkers

The opposition to foreign direct investment (FDI) in the retail business by some opposition parties in India is utterly regressive. FDI in retail will enable massive investments in the India’s trade and supply chain structures, reduce and stabilise prices, ensure improved training and development of staff and hygienic work environments. It will also provide consumers with better and fresher choices in all product categories.

Many state political leaders are taking positions on FDI in retail without a lucid appreciation of advantages to the consumers and suppliers. A few leaders are indulging in rhetoric, drum-beating and emotional outbursts. Many of the antagonists of modern trade may not even have visited a hypermarket. They would benefit by a visit to a supermarket in Bangkok, Thailand or even Muscat, Oman to understand how hypermarkets serve consumers and producers in the villages.

How can we prosper and grow if we cling to the past? Granted that many parts of India are yet very poor, but poverty will not vanish, if we hug it. We have to change our thinking and action paradigms.

The advocates of small grocery shops in India should realise that many of the street-side ‘kirana’ or grocery shops are health hazards. The hygiene levels of small shops in India is the poorest that I have seen among the 50 countries I have visited on work, across continents. Indian shops are poorly maintained and ventilated. They abound in rats, insects and ants. Some shopkeepers do not even undertake basic pest control, just to scrounge on some money.

I have seen open and festering sewage lines, below and around many retail grocery shops. Many of these outlets sell foods, vegetables and fruits to consumers. No wonder a large number of Indians are always suffering from stomach-related ailments like dysentery and diarrhoea.

Many small shops sell date expired stocks by deleting or smudging the information printed by manufacturers on the packs. Many small grocery stores do not give the free gifts (consumer offers), which are given by the manufacturers of consumer product companies. Professionally managed hypermarkets do not indulge in such malpractices.

Political parties are opposing these reforms, purely to pick up votes from select constituents by making inflammatory statements. Most political leaders and parties in India would benefit by comprehending the trade dynamics in traditional stores and modern hypermarkets.

Some opposition parties are opposing FDI reforms, merely to embarrass and corner the ruling Congress leadership. Sure, the Congress has many faults. Corruption and sleaze have flourished recklessly in the last few years. However, that is another battle.

FDI reforms cannot be juxtaposed with our rage against corruption. Nor should any chief minister make retail FDI a rallying election issue and a battering ram, by thundering unemployment and financial bankruptcy. This is preposterous.

Many foreign companies and even ordinary citizens abroad are amused by the FDI political theatre being enacted. Indians who live in the US, Europe, Middle East are flabbergasted at this asinine debate. They are surrounded by hypermarkets in their towns and are bemused by the current imbroglio.

A simple commercial decision has been exacerbated and elongated into an unnecessary political crisis by thoughtless opposition. Hypermarkets co-exist with small shops in most countries in the world – in large, small, rich and poor nations, in all corners of the world.

It is time India removed its blinkers.

(06-12-2011-The author worked for 30 years with Unilever in Latin America, Africa, Asia and was the CEO of a large retail group in the Middle East. He can be reached at [email protected])

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