FDI in Retail: Wholesale victory

Sunil Jain

In any case, make no mistake, the issue was never about the kirana owner, nor was it about the farmer, the poor smelly farmer who BJP leader Sushma Swaraj said may never even be able to sell his produce inside a fancy FDI retail chain—which means she either thinks India's cold chain is so developed, fresh produce will be imported, or that Carrefour simply won't have a fresh produce section.

Nor was it particularly about facts. If it was, Swaraj wouldn't have told us McDonald's doesn't buy Indian potatoes for its fries, or that Pepsi backed out of its commitments to Punjab farmers. Both firms have vehemently denied this.

If, as the BJP made it out to be, the issue was about the poor farmer, surely there were other issues that needed to be raised? After all, farmers lose about 8-10% of their earnings to arhatiyas in government-controlled mandis who have a monopoly over sales—a farmer cannot directly approach a buyer, or vice versa, the deal has to be consummated through an arhatiya who takes all of 5 minutes, or maybe it's 10, to auction off a few trucks of produce. How come no one whose heart bleeds for the farmer raised this, much less did anything about it?

If the debate was really about foreign investment, how come no one spoke about the significant investments made by FIIs in several retail chains in India? According to data cited by corporate law firm AZB & Partners' founding partner Ajay Bahl, Bata has 18% FII investment, Titan 16%, Pantaloon 22% and Tribhovandas Bhimji 11%—it is true this is FII and not FDI, but both are foreign capital, and surely FDI is preferable to FII.

And the debate certainly wasn't about kiranas even though Swaraj brought tears to many eyes when she read out the anti-retail FDI letter by Congress leader Priya Ranjan Dasmunsi who continues to remain in a coma for 4 years now—the helpful cameras in Parliament helpfully panned to Dasmunsi's wife Deepa who is now a member of Parliament from her husband's constituency. If it was about kiranas, why aren't those opposed to retail FDI, and this includes the SP, also protesting about a Reliance Fresh or a Big Bazaar—after all, it can't be more honourable for a kirana to die at Reliance's hands than at Walmart's.

... contd.

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