Recent attacks on Indian-owned and operated retail stores in several Indian states suggest that many Indians object as much to modernization as to globalization. As with the stymied Indo-American civilian nuclear cooperation agreement, the problem is more psychological than political.
Against globalization? A file photo of members of the vegetable and fruit sellers’ association burning an effigy of RIL chairman Mukesh Ambani in Bhopal during the statewide bandh to protest Reliance Fresh stores in August
It has been dinned into Indians for decades that businessmen are crooked, that the generation of wealth is evil and that foreigners are out to loot and pillage the country. The mythology of the recent past painted the US as the sinister “foreign hand” behind India’s social, political and economic troubles. Salvation lay in socialism, virtuous austerity and non-alignment. That is why Prime Minister Manmohan Singh has been forced to put on hold the nuclear deal he reached with President George W. Bush.
A former American ambassador to India, William Saxbe, put it into words in the 1970s: “When I call on cabinet ministers, the president or governors, they all love to talk about their sons, sons-in-law and daughters in the US and how well they’re doing and how well they like things. The next day I read in the papers the very same people are denouncing the US as a totally different kind of country.”
Suspicion of the US is part of the bigger suspicion of everything that goes against the grain of half-a-century’s indoctrination. Resistance to the American Wal-Mart Stores Inc. chain, which is in partnership with the Indian firm Bharti Enterprises, can be put down to xenophobia. But now the fire has been turned on Reliance, an Indian retailing firm operating Western-style supermarkets that is one of the country’s biggest companies. Reliance has a $5.6 billion (Rs22,680 crore) plan to revolutionize shopping with a chain of stores designed to “embrace all strata of society” in 1,500 of the country's towns and cities. It hopes to achieve annual sales of $22.3 billion by 2011.
Today, India’s $350 billion retail trade, which is growing at an annual rate of 20%, is in the hands of some 12 million corner stores, most of them family-run; big chains do not account for more than 3% of sales.
Opposition parties fishing for support among hawkers and small shopkeepers are blamed for the mobs that ransacked Reliance stores in West Bengal, Uttar Pradesh and other states. Militant unions, wholesalers’ organizations, economic Luddites and ultra-nationalists lent them support.
Meanwhile, Indian businessmen such as Mukesh Ambani, the chairman of Reliance Industries Ltd, are not above inflaming nationalist sentiment by complaining that Wal-Mart will flood India with second-rate Chinese goods.
But the real problem is that, in trying to goad the elephant towards modernization, no Union government has made an effort to reach out to the people since the late prime minister P.V. Narasimha Rao announced reforms in 1991. Instead, government and business leaders have preferred liberalization by stealth rather than straightforward education programmes.
While anti-reform groups such as the Forward Bloc and the Trinamool Congress were picketing and stoning Reliance supermarkets, there was nary a squeak of support from the political parties that favour the enterprise—the Bahujan Samaj Party in Uttar Pradesh, West Bengal’s Marxists and the Congress party, which holds power in New Delhi. Their members should have been out in the streets with posters and banners to counter Forward Bloc and Trinamool Congress propaganda and convince farmers, suppliers and buyers that they have everything to gain in terms of quality control, price regulation and variety from efficiently organized retail distribution.
They are as silent about this issue as they were about opening India to special economic zones, which also provoked controversy. Their attitude suggests that India’s political leaders either don’t really believe in economic liberalization or are afraid to take the issue to the voters.
Upholding the status quo, the head of the Forward Bloc in West Bengal, Ashok Ghosh, hailed the closure of Reliance stores in his state as “a victory for the working class, the toiling peasants and the small traders involved with retail of agricultural products.”
Many Indians (and not just in Marxist-ruled West Bengal) see entrepreneurs as the modern incarnations of the “zamindars”—landowners and rent collectors who exploited the peasantry in British times. Many regard multinational corporations as new versions of the British East India Co., which came to India to trade and stayed to rule. That situation leaves the state as the small man’s only protector. No one has told people otherwise.
Sunanda K. Datta-Ray is a former editor of the Statesman newspaper and a visiting research fellow at the Institute of Southeast Asian Studies in Singapore. Send us your comments at firstname.lastname@example.org