Thursday, September 20, 2012

Millions of Indians protest foreign competition to mom-and-pop shops


 
Demonstrators from the Samajwadi Party, a regional political party, shout slogans after they stopped a passenger train during a protest against price hikes in fuel and foreign direct investment (FDI) in retail, near Allahabad railway station September 20, 2012 (Reuters / Jitendra Prakash)

Source: Russia Today
http://rt.com/news/india-strike-retail-reform-550/

India is going through a nationwide strike on Thursday, as shopkeepers, traders and workers protest a governmental reform allowing foreign retail giants into the domestic market. Activists fear the move would leave millions bankrupt.

­The day-long strike and protests were called by opposition parties and trade unions after Prime Minister Manmohan Singh announced the planned reform last week.

Protesters blocked railroads in Kolkata in West Bengal state, squatting on the tracks, a regional official told AFP. Thousands of police were deployed to prevent possible violence. Bihar state in north India saw train and bus stations occupied by activists, leaving thousands of passengers stranded.

Bangalore, the capital of the southern state of Karnataka, was completely shut down. The state has strong support of the main opposition Bharatiya Janata Party (BJP), which is one of the major backers of the strike. India’s largest cities, including New Delhi, are bracing for large protest rallies.

According to the Confederation of All India Traders (CAIT) forecast, some 50 million people may participate in the action in some way. The protest was triggered by government’s plan to allow international companies like Walmart and Tesco trade directly with customers. Currently they can only own shares in retail businesses jointly with domestic companies and sell only to smaller retailers.

The move is aimed to bring foreign investment into the slowing Indian economy, but critics say it will expose small stores, called kiranas, and other retail-related small businesses to crushing international competition.

Kiranas are an important part of Indian culture, with some dubbing the country spurring world-highest shop density “a nation of shopkeepers”. There are an estimated 50 million such shops across the country, and 220 million people depend on them for their livelihoods, CAIT says.

There are fears that exposure of the market to better-organized internationals would drive kiranas out of business, as they would not be able to offer competitive prices.

"If these big guys storm in and wreck what I've fostered for decades, then my family and I will have to resort to a different business," kirana owner Goel, told Reuters.

People skeptical about the protest say opposition politicians are trying to capitalize on people’s fears and the real impact of the reform would not be as bad as they picture it. The shops would have the strength of advantageous placement in residential areas and customer loyalty won over decades.

"The traditional kirana stores and outlets in India have been able to compete very successfully with modern retail for a very long time,"
said a study released by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the global accounting firm PricewaterhouseCoopers. "Their presence in the midst of a residential area is a big advantage."

The Indian government so far remained steadfast in proceeding with the reform.

 

Demonstrators from the Samajwadi Party, a regional political party, shout slogans as they gather around an effigy on a railway track during a protest against price hikes in fuel and foreign direct investment (FDI) in retail, near Allahabad railway station September 20, 2012 (Reuters / Jitendra Prakash)

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