Big fish cometh: Indian retailers against Wal-Mart
27 Jan, 2012 08:42
Fierce opposition to the arrival of international supermarket chains has forced a government rethink in India. Many fear foreign giants could ruin millions of small businesses in India, while supporters argue they would lower prices for consumers.
Singh Chauhan’s family has owned a dried food store for generations. Their shop is one of the many small retail stores that have been operating in a market in Old Delhi for hundreds of years. “The shop helped six generations of our family grow financially and provided us with everything,” Singh Chauhan told RT. However, now Singh Chauhan’s way of life could be at risk: after years of pressure, the Indian government has decided to allow foreign multi-brand retail grocery stores into the Indian market. The likes of Tesco and Wal-Mart could finally access one of the fastest-growing middle classes in the world. Until now, India has only allowed entry to single-brand retail stores, like Reebok. When the country opened up its economy to foreign investment more than a decade ago, economists argued that India needed at least five years to build up its own domestic multi- brand stores before it should allow competition from the outside. Now Indian politicians say it might be the perfect time for foreign companies to enter India’s $590-billion retail sector. The politicians behind the push say that farmers can make more money and consumers will pay less for food if these stores are allowed into the country. Foreign retailers, they say, could provide organization to India’s supply chain by cutting out unnecessary middle men. President Obama and other western leaders have also been putting pressure on India to allow their stores to open in the country, arguing that they could provide jobs to millions of Indians. However, the country’s small business owners argue that it is an idea that would jeopardize their way of life.“Once these big stores open up, small business will not be able to compete with them and they will find it hard to survive,” Singh Chauhan said. “This is a conspiracy against us to shut us down and open big shops but we will not allow this to happen in India.” Suresh Bhardawa of Khari Baoli traders’ association believes that Indian traditional businesses will be heavily affected if the foreign giants are allowed in the country. “The small business will be swallowed by Wal-Mart the way small fishes are eaten by the big fishes in the sea,” he said. “The small family-run businesses will be completely destroyed, jeopardizing the financial situation of families and children.” For now, opposition within India has stalled the decision from being finalized. Store owners like Singh Chauhan are watching the debate closely, wondering if his family’s business and the Old Delhi that he has known his whole life will suddenly change.