The crypto class of DA-IICT met with an unexpected guest the other day. The guest, who belongs to a global IT firm, brought with him the company's brand new technology on games. Now games are often a gamble. They leave you with the art of addiction. But the technology has the potential of encroaching many enthusiastic consumers. And that's why it sells and will sell.
The main driver of all innovations and inventions is capital. Every big or small firm relies on exploiting its consumer base with the sole intention of profit-making. Going by this simple law of management, it would be imprudent to invite foreign retailers and expose the present indigenous business paradigm into jeopardy.
India's market follow a chain – right from the farmers to the consumers via traders, retailers, kiranas, small shopkeepers and the like. There are multitudes who depend primarily in the flow above to make a living. In some states like West Bengal, existence of small-shops are rampant. Thousands of families survive on this form of indigenous trade.
Bringing retail giants like Walmart and Tesco may seemingly improve the situation for the end-consumers vis-a-vis competitive prices, large employment of locals, professional business dealings, transparency, less hoarding, tax evasion etc.
But one must understand there is no free lunch. At the cost of such luxuries, the 51% occupation of these giants can contain and bring down the entire flow of indigenous retail business. They may dominate over farmers and producers, gear for monopolies of both kinds, subdue all local indigenous shopkeepers, outsource goods of foreign countries heavily and forcibly sell it here and eventually control production, market and economy. After all what is the guarantee that all such capital inflow from outside will stabilize our slipping economical condition.
India's essence lies its pluralism. There is a very different bond that pluralistic market offers to the retailer-consumer community. There plays an unmatched faith between a local vegetable vendor and his madame. Each party wishfully is bound in an obligational transaction – that of bargain, quality, profit, loss and discount. There flows a river of emotional dependency, not any professionalism. Thus while you invite FDI, you throw away all such pristine, pious indigenous retail trade heritage.
(This piece appeared in the point-counterpoint section of January edition of Entelechy - DA-IICT's pressclub site.)
