The arguments peddled by the Government in favour of FDI in retail are entirely unconvincing and false. The claim that FDI in retail will benefit farmers and consumers has proven to be false in many countries. Just last week, a leading American newspaper reported that American onion farmers are suffering at the hands of Walmart which is selling onions at nine times the purchase price. Walmart and other chain stores also dictated arbitrary size standards as a result of which huge amounts of crops that failed to meet those standards were left to rot. Globally, MNC retail giants are not known to have ensured higher prices for producers or lower prices for consumers – if anything, the opposite. Far from ‘eliminating middlemen’ as the UPA Government claims, the MNC retail giants will in fact emerge as foreign middlemen, immensely more powerful than any producer - whether farmers or manufacturers – and will therefore be able to play with prices and eventually enjoy a veritable monopoly.
Another favourite argument is that FDI in retail is necessary to usher in superior technology – specifically, cold chains to prevent wastage. Why should foreign investment be needed for something as basic as cold storage? As we have seen above, preventing wastage is hardly a concern for the MNC retail giants. Not only is produce that fails to meet arbitrary size standards rejected and left to waste, the global food industry controlled by the MNC retailers is known to waste almost half the food it procures.
Even the debate was underway in Indian Parliament, it was known that an enquiry is underway in the US into allegations of bribery by Walmart in several countries including Mexico, India, China and Brazil. There are indications that Walmart and its subsidiaries paid bribes in order to expand its network of stores in those countries. Further, the Enforcement Directorate in India is probing an allegation that Walmart secretly and illegally invested 100 million dollars in its wholesale partner Bharti Enterprises, way back in 2010 when foreign players were barred from entry into India’s retail business. At the same time, Walmart had disclosed that it spent Rs 125 crore since 2008 on lobbying US senators on various issues, including “enhanced market access for investment in India.” How exactly was the money spent on ‘lobbying’ for entry into India? Who are the alleged recipients of bribes by Walmart in India, according to the ongoing enquiry? These unanswered questions indicate that the process by which the FDI in retail policy has been adopted is murky.
It is ironic that the Indian Government is pushing through the FDI in retail policy aggressively pushed by the US, that will endanger India’s small retailers and kirana stores, at a time when the retail giants are facing protests in the US for putting small stores out of business and underpaying employees. US President Obama, just recently, has taken his daughters for Christmas shopping to a small bookstore, to be seen promoting a scheme called ‘Small Business Saturday’ intended to support small ‘mom-and-pop’ stores.
In the Lok Sabha, the SP and BSP chose to walk out of the house after having opposed the FDI in retail policy, thereby ensuring safe passage for the policy. In the Rajya Sabha, the BSP voted for FDI in retail, ensuring a comfortable victory for the Government. Several MPs strategically stayed away from Parliament on the day of the vote, in order to facilitate the Government while avoiding being seen voting in favour of FDI in retail. In the Lok Sabha, the absentees included JMM chief Shibu Soren as well as JVM chief Babulal Marandi, while JMM MP Kameshwar Baitha voted in favour of FDI in retail! In the Rajya Sabha, the sole JMM MP walked out of the house at the time of voting.
The claim by the SP and BSP that they did not vote against FDI in retail so as not to benefit the communal BJP is laughable; the BSP is known to have shared power with the BJP in UP, while the SP is known to have done business with Kalyan Singh, the man who as Chief Minister of UP from the BJP, had presided over the demolition of the Babri Masjid.