FDI: Time to look to the future

Sep 19, 2012, 07:24 IST | Ranjona Banerji

Ranjona BanerjiI’ve decided to look at this brouhaha into foreign direct investment in retail as simplistically as I can. I live just off Linking Road in Mumbai. Five minutes from my doorstep and I am hit with foreign brands selling me everything from shoes to bags to clothes to watches. Foreign is no longer a dirty word from the realms of India’s socialist past. The neighbourhood grocery store of the slightly fancy variety will send me as many foreign provisions as I want from cheese to tea to coffee to chocolates. These shops also sell Indian-made dal, atta, dhania, jeera and so on, unlike some snooty delicatessens in Bandra, which will not sell Indian-made cold cuts. They are family-run and look like they started out as kirana shops but upgraded themselves based on the clientele. There are giant supermarkets in the area — of the Reliance and Big Bazaar variety — which I have never yet visited. The neighbourhood shops have the biggest advantage of all — home delivery.

Shopkeepers and Shiv Sena activists burn PM Manmohan Singh
‘Down with FDI’: Shopkeepers and Shiv Sena activists burn PM Manmohan Singh in effigy during a demonstration against FDI in multi-brand retail

But many people — like the ladies who appear magically once a day to clean and cook for an hour — love the giant supermarkets. I have to collect all the ads which offer super-cheap deals and exchange offers for them so that they can spend their Sundays saving money. Monday morning, I hear horror stories about long queues and immense patience in the face of prodigious crowds but such joy at the bargains found.

I do not have the courage to tell them that they have to support the local kirana, no matter what.

In the same way, I do not have the courage to tell millions of consumers and job seekers that they cannot look forward to cheap fare or to more opportunities if foreign supermarket chains arrive. Just because I do not use them does not mean that no one else can. (I’ve never eaten at a McDonald’s in India either!) I also know that so many of the Indian-run department store chains and clothes chains have vanished or are struggling since the advent of the foreign brands and massive shopping malls. No tears have been shed for them.

Farmers will suffer with the arrival of FDI in retail say some critics. The country is being sold to foreign forces say others. I can definitely say that India has suffered from a consistent neglect of universal education and healthcare. All else is open to argument but almost no politician or political party or administrator is more than cursorily interested in education or healthcare despite our horrific literacy and mortality figures. FDI in retail bothers us more.

When it comes to farmers, we have heard everything: that they benefit from cheap electricity and fertiliser, they keep getting loans written off at the cost of everyone else or that being forced to use genetically modified seeds has hurt them incalculably. That these seeds came from foreign companies does not arouse the patriotism of our politicians – mutual benefit is so clearly apparent.

What I do know is that the farmer gets a pittance for a kilogram of tomatoes while you and I pay a king’s ransom. I also know that much farm produce rots before it can reach the market. Direct purchase from the farm gate and a better storage system, which large supermarket chains tend to use might actually help.

I end as I started – simplistically. There is no way India can be turned back a century because someone or many someones want to make political capital out of it. Progress and development are inevitable and necessary. If the process is too painful and there are some people to be helped through it or saved from total destruction, then humane compromises have to be found. No one wants India to be sold down the river. But no one — one hopes — wants India to be forced to paddle down the river with only one oar.

Ranjona Banerji is a senior journalist. You can follow her on twitter @ranjona 

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