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Understanding the Historical Conflicts Behind Todays Violence in Assam

SOURCE: AP/Tsering Topgyal

An Indian supporter holds a placard during a protest against what they say is illegal migration of Muslims from Bangladesh to the northeastern Indian state of Assam. The conflict in the state could get worse as the effects of climate change become more drastic. By Arpita Bhattacharyya | August 29, 2012
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Endnotes and citations are available in the pdf version of this issue brief. Recent violence between the Bodo tribe and immigrant minorities in the northeastern Indian state of Assam has cost the lives of at least 96 people and caused more than 300,000 residents to flee their homes for refugee camps. The violence also led to mass panic among northeastern migrants across India, when text messages and videos circulated social media sites warning of attacks on northeastern migrants in southern Indian cities such as Bangalore and Pune in retaliation for the deaths of Muslim minorities in Assam. The violence and resulting panic revealed a fragile peace in Assam and demonstrated the speed with which historical tensions can bubble over into larger confrontations that could roil the whole country. A lot of this tension could worsen with the confluence of climate change, migration patterns, and community security in Assam and Indiaa confluence that the Center for American Progress is examining in a series of papers and events on climate change, migration, and security. Before looking at those patterns in Assam, lets first take a look back at Assams history to better understand todays conflicts.

Assams troubled past

Assam is located in the northeastern part of India and shares a border with China, Myanmar, Nepal, Bhutan, and Bangladesh. This underdeveloped region, which is connected to India politically by a small land bridge, is also known as the Seven Sisters and includes the states Assam, Arunachal Pradesh, Nagaland, Manipur, Meghalaya, Tripura, and Mizoram. The surrounding countries cultures have influenced Assam, creating a patchwork of ethnic, religious, and linguistic traditions that distinguish the Seven Sisters from the rest of India. The Bodos are one of the main indigenous tribes located in the western region of Assam. In the 2001 Census the Bodos made up around 5 percent of Assams entire population.

The Bodo insurgents have been fighting for years for statehood in India. In 2003 they were granted special status through the creation of the Bodoland Territorial Autonomous Districts in exchange for ceasing their insurgency. The total area of Bodoland is about 8,970 square kilometersroughly the size of Cyprusand includes more than 3,000 villages. The status allows the Bodoland Territorial Council to legislate on communal-level issues such as agriculture, education, and tourism. Though the Bodos govern the districts, the tribe only makes up one-third of the overall population therein. The remainder of the residents belong to other indigenous tribal groups or are native Assamese. Muslims are the second-largest group in the region, and tensions have long simmered between Bodos and Muslim residents over land-ownership rights. The most recent incident before the current violence was in 2008, when fighting between the two groups resulted in 55 deaths, more than 100 injuries, and 200,000 people escaping to refugee camps. The main issue between the two groups is land, with Bodos claiming that undocumented Muslim immigrants from Bangladesh are taking land rightfully owned by Bodos. Muslim communities, however, view the accusation of illegal Muslim Bangladeshi settlement as a false campaign to restrict their rights and drive Muslims from the area.

Moreover, Bengali-speaking Muslims settled in the area long before the British Partition created the state of Bangladesh in 1947. This makes it difficult to determine who is a Bengalispeaking Muslim long-term resident versus an illegal Bangladeshi immigrant. Before 1947 India and Bangladesh were unified and ruled as British Indiathus the issue of illegal immigration did not exist. Following independence from Britain, present-day Bangladesh was East Pakistan until 1971, when East Pakistan fought for independence from West Pakistan. During that war, 10 million East Pakistanis (including many Bengali-speaking Muslims) fled to India. Given this history, it is difficult to distinguish between Bengali-speaking Muslims in Assam who lived in the area before the Partition, those who moved during the 1971 war as refugees, and those who moved after the war, including the illegal Bangladeshi immigrants whom the Bodos distinguish. The issue of illegal Bangladeshi immigration has therefore been a prominent political and social issue in Assam since the partition of India but has more acutely impacted local and regional politics in the past four decades. In 1979 a group called the All Assam Students Union began a campaign against illegal Bangladeshi immigrants in Assam, who they believed were changing their states demographics and gaining political influence. The All Assam Students Unions main demand was that the names of illegal immigrants be taken off of the electoral rolls before the next election. The campaign led to violence across the states, with Bengali-speaking Muslims indiscriminately targeted as illegal Bangladeshis. The violence peaked in the early 80s, after four years of the government refusing to meet the unions demands. The All Assam Students Union mobilized against the election in 1983, demanding that all illegal immigrants or so-called infiltrators be deleted from electoral rolls and deported immediately. Instead, the Indian central government went ahead with elections, inciting further conflict. Official government reports indicate that more than 4,000 people died during the lead up to the election, while nongovernment reports put the death toll at around 7,000. The violence also led to the burning of more than 1,600 bridges in attempts to prevent election officials from reaching constituencies. Then on February 18, 1983, fighting broke out in the district of Nellie between villagers and those seen as illegal immigrants, with estimates of 2,000 peoplemostly Muslimslosing their lives. The massive death toll led to wide condemnation of the massacre and helped catapult the then-opposition Congress Party back into power in the state government of Assam. The Congress Party in Assam is part of the greater Indian National Congress Party. The National Congress Party was founded in 1885 and was a key player in the Indian movement for independence from Great Britain. The party has also formed the central Indian government for most time periods since independence. The Muslim League, a group active during independence and Partition, merged with the National Congress Party in those years, bringing

with it the Muslim voting bloc. The Congress Party held power in Assam for the first two decades after independence and did not highlight the issue of illegal immigration in the way the All Assam Students Union thought necessary. The forced 1983 elections and the contentious results led the All Assam Students Union and likeminded groups to form a new political party, the Asom Gana Parashid, to counter the Congress Party in Assam. Two years of talks amid lingering conflict eventually led to the Assam Accord in 1985. The Assam Accord laid out the following provisions to deal with the immigrant issue: Immigrants who arrived before January 1, 1966, are recognized as citizens. Immigrants who arrived between January 1966 and March 25, 1971, fall under the Foreigners Act (Indian national law), must register themselves in district offices, and will not be able to vote until 10 years after their registration. Immigrants who arrived after 1971 will be identified, removed from voting rolls, and deported. The signing of the Assam Accord ultimately ended the All Assam Students Union movement but the tension surrounding the issue of immigration lingers on. Implementation of the accord has been contentious, and outbreaks of violence over migration have continued on a small scale since 2003 and have escalated into the violence that is taking place presently.

Todays violence in Assam

The current situation in Assam between the Bodo tribe and immigrant minorities in the northeast started at the end of May, when a signboard was allegedly removed from a mosque by the Bodoland Territorial Council because it claimed that the mosque was illegally occupying forest land. In protest, a local Muslim youth groupthe All Bodoland Minority Students Unioncalled for the shutdown of the Kokrajhar district, but the Bodoland Territorial Council prevented the shutdown. The ensuing confrontations between the Students Union and the police led to more than a dozen injuries. Tensions rose between the Bodo and Muslim communities in Kokrajhar, and on July 6 four people shot one Muslim man and injured four others. Two weeks later two men killed Mohibul Islam, the founder and president of the All Bodoland Minority Students Union, and Abdul Siddique Sheikh of the Muslim minority group, the All Assam Minority Students Union. This confrontation was followed by the death of four Bodo youths, allegedly killed in a Muslimdominated area in Kokrajhar. Fighting spread to neighboring Dhubri district, with hundreds of homes torched, forcing more than 400,000 people to flee to relief camps in the area. The conditions in the refugee camps are dire; The New York Times reports that one camp has only 10 makeshift toilets for 4,300 people, while at another site more than 6,500 people have crammed into a high school.

Then during the week of August 13, rumors of Muslim attacks on northeastern labor immigrants in southern Indian cities began circulating via social media sites and text messages, leading to a mass exodus from Bangalore and Chennai. Meanwhile, in Mumbai Muslim groups held a rally to protest the violence against Muslims in Assam and the attacks on the Muslim Rohingyas in Myanmar that have been happening since June. The rally escalated into a riot and left two dead and many injured. The Indian central governmentasserting that the messages and videos were designed to cause panic and sow fear among northeastern residents, rather than warn of any real security threatblocked 250 web sites and social networking sites, including Facebook, Twitter, Google, YouTube, and fundamentalist Pakistani websites, and also banned text messages sent to more than five people for two weeks. The BBC reports that India has offered to share the evidence with Pakistan that the bulk of these messages, pictures, and videos had their origin in Pakistan, specifically with the names of organizations in Pakistan. Fresh violence ensued earlier this week in Kokrajhar, leaving one man dead and injuring five others. Meanwhile, hundreds are still living in relief camps.

Considering climate change

The current conflict reveals the underlying tensions stirring in the worlds largest democracy stresses that are unlikely to disappear anytime soon. It is difficult to determine whether illegal Bangladesh immigrants are, in fact, taking over Bodo lands, or whether the Indian Bengalispeaking Muslim population is simply growing. No accurate statistics or studies exist to understand the exact demographic and historical breakdown of the Bodoland territory. Yet public perceptions, fear, and mass communication through social media uprooted an entire Indian state, creating mass havoc and killing dozens. This outcome was impossible to predict, but it will be important to understand the stresses that could lead to future misperceptions and panic. Contributing to this effort, the Center for American Progresss project on climate, migration, and security will soon release a report detailing how changing environmental conditions and migratory patterns could contribute to existing tensions in Assam and Bangladesh. The paper will show how climate change and environmental degradation have the potential to displace large groups of people in both India and Bangladesh due to floods, increasing variations in rainfall, sea-level rise, and drought. The exact impacts of this displacement on international migration across India and Bangladeshs 4,095-mile border are not easy to quantify, but the problem is real. As became obvious this summer, even small shifts in crossborder migration have the potential to incite conflict and exacerbate existing tensions.

Moreover, the mere perception that there might be an increase in the number of migrants could contribute to instability in the region. South Asia will be one of the most climate vulnerable regions in the world and, as the United States pivots its interest toward Asia, understanding the long-term trends shaping the region will be crucial for U.S. defense, diplomacy, and development policies. The different dimensions of complex crisis scenarios, including religious and social factors, will have to be considered in planning for disaster relief and temporary resettlement in the face of more frequent storms and floods so as to avoid inciting or exacerbating conflicts. Assams troubled history with migration serves as a case study for the complex intersection of climate change, migration, and security with which the world must grapple in the 21st century. Arpita Bhattacharyya is Research Assistant to Distinguished Senior Fellow Carol Browner at the Center for American Progress.
To speak with our experts on this topic, please contact: Print: Katie Peters (economy, education, and health care) 202.741.6285 or kpeters1@americanprogress.org Print: Christina DiPasquale (foreign policy and security, energy) 202.481.8181 or cdipasquale@americanprogress.org Print: Laura Pereyra (ethnic media, immigration) 202.741.6258 or lpereyra@americanprogress.org Radio: Anne Shoup 202.481.7146 or ashoup@americanprogress.org TV: Lindsay Hamilton 202.483.2675 or lhamilton@americanprogress.org Web: Andrea Peterson 202.481.8119 or apeterson@americanprogress.org

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Retailing in India
From Wikipedia, the free encyclopedia

A textile retail store in India

A fish retail store in West Bengal, India

A food staple retail shop in Pushkar, India

Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP. [1][2] The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail market in the world, with 1.2 billion people. [3][4] India's retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centers. India's retail and logistics industry employs about 40 million Indians (3.3% of Indian population). Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even singlebrand retail was limited to 51% ownership and a bureaucratic process. In November 2011, India's central government announced retail reforms for both multi-brand stores and singlebrand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, and Apple.[5] The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus.[6] In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores.[7] In June 2012, IKEA announced it has applied for permission to invest $1.9 billion in India and set up 25 retail stores. Fitch believes that the 30 percent requirement is likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan from opening stores and creating associated jobs in India.[8][9] On 14 September 2012, the government of India announced the opening of FDI in multi brand retail, subject to approvals by individual states. [10]. This decision has been welcomed by economists and the markets, however has caused a massive upheaval in India's delicate governance structure.

Contents
[hide]

1 Local terms 2 Background 3 Growth

o o

3.1 Growth over 1997-2010 3.2 Growth after 2011

4 The Indian Retail Market 5 Major Indian Retailers 6 Challenges 7 India retail reforms

o o

7.1 Indian retail reforms on hold 7.2 Single-brand retail reforms approved

8 Social impact and controversy with retail reforms

o o o

8.1 Controversy over Indian retail reforms 8.2 Opposition to retail reforms 8.3 Support for retail reforms

9 See also

8.3.1 Farmer groups 8.3.2 Economists and entrepreneurs 8.3.3 Chief Ministers of Indian states 8.3.4 Current supermarkets

10 External links 11 References

[edit]Local

terms

Organised retailing, in India, refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the publicly traded supermarkets, corporatebacked hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local mom and pop store, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.[11]

Organised retailing was absent in most rural and small towns of India in 2010. Supermarkets and similar organized retail accounted for just 4% of the market.[5] [edit]Background

A vegetable retail market in Kerala, India on a sunny day; During monsoons, vendors experience more produce spoilage.

Most Indian shopping takes place in open markets or millions of small, independent grocery and retail shops. Shoppers typically stand outside the retail shop, ask for what they want, and can not pick or examine a product from the shelf. Access to the shelf or product storage area is limited. Once the shopper requests the food staple or household product they are looking for, the shopkeeper goes to the container or shelf or to the back of the store, brings it out and offers it for sale to the shopper. Often the shopkeeper may substitute the product, claiming that it is similar or equivalent to the product the consumer is asking for. The product typically has no price label in these small retail shops; although some products do have a manufactured suggested retail price (MSRP) pre-printed on the packaging. The shopkeeper prices the food staple and household products arbitrarily, and two consumers may pay different prices for the same product on the same day. Price is sometimes negotiated between the shopper and shopkeeper. The shoppers do not have time to examine the product label, and do not have a choice to make an informed decision between competitive products. India's retail and logistics industry, organized and unorganized in combination, employs about 40 million Indians (3.3% of Indian population).[12] The typical Indian retail shops are very small. Over 14 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size. India has about 11 shop outlets for every 1000 people. Vast majority of the unorganized retail shops in India employ family members, do not have the scale to procure or transport products at high volume wholesale level, have limited to no quality control or fake-versus-authentic product screening technology and have no training on safe and hygienic storage, packaging or logistics. The unorganized retail shops source their products from a chain of middlemen who mark up the product as it moves from farmer or producer to the consumer. The unorganized retail shops typically offer no after-sales support or service. Finally, most transactions at unorganized retail shops are done with cash, with all sales being final.

Until the 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Some retails faced complying with over thirty regulations such as "signboard licences" and "anti-hoarding measures" before they could open doors. There are taxes for moving goods to states, from states, and even within states in some cases. Farmers and producers had to go through middlemen monopolies. The logistics and infrastructure was very poor, with losses exceeding 30 percent. Through the 1990s, India introduced widespread free market reforms, including some related to retail. Between 2000 to 2010, consumers in select Indian cities have gradually begun to experience the quality, choice, convenience and benefits of organized retail industry. [edit]Growth

An organized retail store in Ahmedabad (ca. 2009)

Customers inside a retail store in Kolkata (ca. 2011)

[edit]Growth

over 1997-2010

India in 1997 allowed foreign direct investment (FDI) in cash and carry wholesale. Then, it required government approval. The approval requirement was relaxed, and automatic permission was granted in 2006. Between

2000 to 2010, Indian retail attracted about $1.8 billion in foreign direct investment, representing a very small 1.5% of total investment flow into India.[13] Single brand retailing attracted 94 proposals between 2006 and 2010, of which 57 were approved and implemented. For a country of 1.2 billion people, this is a very small number. Some claim one of the primary restraint inhibiting better participation was that India required single brand retailers to limit their ownership in Indian outlets to 51%. China in contrast allows 100% ownership by foreign companies in both single brand and multi-brand retail presence. Indian retail has experienced limited growth, and its spoilage of food harvest is amongst the highest in the world, because of very limited integrated cold-chain and other infrastructure. India has only 5386 stand-alone cold storages, having a total capacity of 23.6 million metric tons. However, 80 percent of this storage is used only for potatoes. The remaining infrastructure capacity is less than 1% of the annual farm output of India, and grossly inadequate during peak harvest seasons. This leads to about 30% losses in certain perishable agricultural output in India, on average, every year.[13] Indian laws already allow foreign direct investment in cold-chain infrastructure to the extent of 100 percent. There has been no interest in foreign direct investment in cold storage infrastructure build out. Experts claim that cold storage infrastructure will become economically viable only when there is strong and contractually binding demand from organized retail. The risk of cold storing perishable food, without an assured way to move and sell it, puts the economic viability of expensive cold storage in doubt. In the absence of organized retail competition and with a ban on foreign direct investment in multi-brand retailers, foreign direct investments are unlikely to begin in cold storage and farm logistics infrastructure. Until 2010, intermediaries and middlemen in India have dominated the value chain. Due to a number of intermediaries involved in the traditional Indian retail chain, norms are flouted and pricing lacks transparency. Small Indian farmers realize only 1/3rd of the total price paid by the final Indian consumer, as against 2/3rd by farmers in nations with a higher share of organized retail.[13] The 60%+ margins for middlemen and traditional retail shops have limited growth and prevented innovation in Indian retail industry. India has had years of debate and discussions on the risks and prudence of allowing innovation and competition within its retail industry.[14]Numerous economists repeatedly recommended to the Government of India that legal restrictions on organized retail must be removed, and the retail industry in India must be opened to competition. For example, in an invited address to the Indian parliament in December 2010, Jagdish Bhagwati, Professor of Economics and Law at the Columbia University analysed the relationship between growth and poverty reduction, then urged the Indian parliament to extend economic reforms by freeing up of the retail sector, further liberalisation of trade in all sectors, and introducing labor market reforms. Such reforms Professor Bhagwati argued will accelerate economic growth and make a sustainable difference in the life of India's poorest.,[15][16]

A 2007 report noted that an increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6 percent.[17] The Retail Business in India is currently at the point of inflection. As of 2008, rapid change with investments to the tune of US $ 25 billion were being planned by several Indian and multinational companies in the next 5 years. It is a huge industry in terms of size and according to India Brand Equity Foundation (IBEF), it is valued at about US$ 395.96 billion. Organised retail is expected to garner about 16-18 percent of the total retail market (US $ 65-75 billion) in the next 5 years. India has topped the A.T. Kearneys annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. The Indian economy has registered a growth of 8% for 2007. The predictions for 2008 is 7.9%.[18] The enormous growth of the retail industry has created a huge demand for real estate. Property developers are creating retail real estate at an aggressive pace and by 2010, 300 malls are estimated to be operational in the country.[19] [edit]Growth

after 2011

Before 2011, India had prevented innovation and organized competition in its consumer retail industry. Several studies claim that the lack of infrastructure and competitive retail industry is a key cause of India's persistently high inflation. Furthermore, because of unorganized retail, in a nation where malnutrition remains a serious problem, food waste is rife. Well over 30% of food staples and perishable goods produced in India spoils because poor infrastructure and small retail outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.,,[20][21][22] One report estimates the 2011 Indian retail market as generating sales of about $470 billion a year, of which a miniscule $27 billion comes from organized retail such as supermarkets, chain stores with centralized operations and shops in malls. The opening of retail industry to free market competition, some claim will enable rapid growth in retail sector of Indian economy. Others believe the growth of Indian retail industry will take time, with organized retail possibly needing a decade to grow to a 25% share.[22] A 25% market share, given the expected growth of Indian retail industry through 2021, is estimated to be over $250 billion a year: a revenue equal to the 2009 revenue share from Japan for the world's 250 largest retailers.,[23][24] The Economist forecasts that Indian retail will nearly double in economic value, expanding by about $400 billion by 2020.[25] The projected increase alone is equivalent to the current retail market size of France. In 2011, food accounted for 70% of Indian retail, but was under-represented by organized retail. A.T. Kearney estimates India's organized retail had a 31% share in clothing and apparel, while the home supplies

retail was growing between 20% to 30% per year.[26] These data correspond to retail prospects prior to November announcement of the retail reform. The Indian market offers endless possibilities for investors. [27] [edit]The

Indian Retail Market

This section requires expansion.(January 2012)

Indian market has high complexities in terms of a wide geographic spread and distinct consumer preferences varying by each region necessitating a need for localization even within the geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6 percent is highest in the world.[28] 1.8 million households in India have an annual income of over 45 lakh (US$81,450).[29] While India presents a large market opportunity given the number and increasing purchasing power of consumers, there are significant challenges as well given that over 90% of trade is conducted through independent local stores. Challenges include: Geographically dispersed population, small ticket sizes, complex distribution network, little use of IT systems, limitations of mass media and existence of counterfeit goods.[30] [edit]Major

Indian Retailers

This section requires expansion.(January 2012)

[dated info]

Checkout lanes, organized retail in Malad, Mumbai

Indian apparel retailers are increasing their brand presence overseas, particularly in developed markets. While most have identified a gap in countries in West Asia and Africa, some majors are also looking at the US and Europe. Arvind Brands, Madura Garments, Spykar Lifestyle and Royal Classic Polo are busy chalking out foreign expansion plans through the distribution route and standalone stores as well. Another denim wear brand, Spykar, which is now moving towards becoming a casualwear lifestyle brand, has launched its store in Melbourne recently. It plans to open three stores in London by 2008-end.[31] The low-intensity entry of the diversified Mahindra Group into retail is unique because it plans to focus on lifestyle products. The Mahindra Group is the fourth largest Indian business group to enter the business of retail after Reliance Industries Ltd, the Aditya Birla Group, and Bharti EnterprisesLtd. The other three groups are focusing either on perishables and groceries, or a range of products, or both.

REI AGRO LTD Retail: 6TEN and 6TEN kirana stores Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc.

Raymond Ltd.: Textiles, The Raymond Shop, Park Avenue, Park Avenue Woman, Parx, Colourplus, Neck Ties & More, Shirts & More etc.

Fabindia: Textiles, Home furnishings, handloom apparel, jewellery RP-Sanjiv Goenka Group Retail-Formats: Spencers Hyper, Spencer's Daily, Music World, Au Bon Pain (Internaional bakery cafeteria), Beverly Hills Polo Club

The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma.

Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance Autozone, iStore

Reliance ADAG Retail-Format: Reliance World K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall Nilgiris-Formats: Nilgiris supermarket chain Marks & Spencer: Clothing, lifestyle products, etc. Shri Kannan Departmental Store (P) Ltd ., : Groceries, Clothing, Cosmetics [Western Tamilnadu's Leading Retailer]

Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores. Pyramid Retail-Formats: Pyramid Megastore, TruMart Next retail India Ltd (Consumer Electronics)(www.next.co.in) Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe Deposit Lockers

PGC Retail -T-Mart India [1], Switcher, Respect India, Grand India Bazaar,etc., Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain. Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out German Metro Cash & Carry Shoprite Holdings-Formats: Shoprite Hyper Paritala stores bazar: honey shine stores Aditya Birla Group - "More" Outlets Kapas- Cotton garment outlets AaramShop - a platform which enables hybrid commerce for thousands of neighborhood stores. Nmart Retails with 131 operating Stores till now and total 287 Stores in India and 1 to open in DUBAI Shortly and many more in Process Globally (ZAMBIA, BANGLADESH, SRI LANKA etc.). (Expected to be 500 by the end of 2012)(www.nmart.co.in)

Gitanjali- Nakshatra, Gili, Asmi, D'damas, Gitanjali Jewels, Giantti, Gitanjali Gifts, etc.

Entry of MNCs

A spice market

The world's largest retailer by sales, Wal-Mart Stores Inc and Sunil Mittal's Bharti Enterprises have entered into a joint venture agreement and they are planning to open 10 to 15 cash-and-carry facilities over seven years. The first of the stores, which will sell groceries, consumer appliances and fruits and vegetables to retailers and small businesses, is slated to open in north India by the end of 2008.[32] see also for more Detail Pick/Mller "[2]"</ref> Carrefour, the worlds second largest retailer by sales, is planning to set up two business entities in the country one for its cash-and-carry business and the other a master franchisee which will lend its banner, technical services and know how to an Indian company for direct-to-consumer retail.[33]

The worlds fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its warehouse club model is also interested in coming to India and waiting for the right opportunity.[34] Tesco Plc., plans to set up shop in India with a wholesale cash-and-carry business and will help Indian conglomerate Tata group to grow its hypermarket business. [edit]Challenges A McKinsey study claims retail productivity in India is very low compared to international peer measures. For example, the labor productivity in Indian retail was just 6% of the labor productivity in United States in 2010. India's labor productivity in food retailing is about 5% compared to Brazil's 14%; while India's labor productivity in non-food retailing is about 8% compared to Poland's 25%.[35] Total retail employment in India, both organized and unorganized, account for about 6% of Indian labor work force currently - most of which is unorganized. This about a third of levels in United States and Europe; and about half of levels in other emerging economies. A complete expansion of retail sector to levels and productivity similar to other emerging economies and developed economies such as the United States would create over 50 million jobs in India. Training and development of labor and management for higher retail productivity is expected to be a challenge. To become a truly flourishing industry, retailing in India needs to cross the following hurdles:[36]

Automatic approval is not allowed for foreign investment in retail. Regulations restricting real estate purchases, and cumbersome local laws. Taxation, which favours small retail businesses. Absence of developed supply chain and integrated IT management. Lack of trained work force. Low skill level for retailing management. Lack of Retailing Courses and study options Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins.

In November 2011, the Indian government announced relaxation of some rules and the opening of retail market to competition. [edit]India

retail reforms

Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand Indian retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets, to sell multiple products from different brands directly to Indian consumers..

The government of Manmohan Singh, prime minister, announced on 24 November 2011 the following: [20][37]

India will allow foreign groups to own up to 51 per cent in "multi-brand retailers", as supermarkets are known in India, in the most radical pro-liberalisation reform passed by an Indian cabinet in years;

single brand retailers, such as Apple and Ikea, can own 100 percent of their Indian stores, up from the previous cap of 51 percent;

both multi-brand and single brand stores in India will have to source nearly a third of their goods from small and medium-sized Indian suppliers;

all multi-brand and single brand stores in India must confine their operations to 53-odd cities with a population over one million, out of some 7935 towns and cities in India. It is expected that these stores will now have full access to over 200 million urban consumers in India;

multi-brand retailers must have a minimum investment of US$100 million with at least half of the amount invested in back end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing to considerably reduce the post harvest losses and bring remunerative prices to farmers;

the opening of retail competition will be within India's federal structure of government. In other words, the policy is an enabling legal framework for India. The states of India have the prerogative to accept it and implement it, or they can decide to not implement it if they so choose. Actual implementation of policy will be within the parameters of state laws and regulations.

The opening of retail industry to global competition is expected to spur a retail rush to India. It has the potential to transform not only the retailing landscape but also the nation's ailing infrastructure.,[20][38] A Wall Street Journal article claims that fresh investments in Indian organized retail will generate 10 million new jobs between 20122014, and about five to six million of them in logistics alone; even though the retail market is being opened to just 53 cities out of about 8000 towns and cities in India.[38] It is expected to help tame stubbornly high inflation but is likely to be vehemently opposed by millions of small retailers, who see large foreign chains as a threat. The need to control food price inflationaveraging doubledigit rises over several yearsprompted the government to open the sector, analysts claim. Hitherto India's food supplies have been controlled by tens of millions of middlemen (less than 5% of Indian population). Traders add huge mark-ups to farm prices, while offering little by way of technical support to help farmers boost their productivity, packaging technology, pushing up retail prices significantly. Analysts said allowing in big foreign retailers would provide an impetus for them to set up modern supply chains, with refrigerated vans, cold storage and more efficient logistics. "I think foreign chains can also bring in humongous logistical benefits and capital," Chandrajit Banerjee, director-general, Confederation of Indian Industry, told Reuters. "The biggest beneficiary would be the small farmers who will be able to improve their productivity by selling directly to large organised players," Mr Banerjee said.

[edit]Indian

retail reforms on hold

According to Bloomberg, on 3 December 2011, the Chief Minister of the Indian state of West Bengal, Mamata Banerjee, who is against the policy and whose Trinamool Congress brings 19 votes to the ruling Congress party-led coalition, claimed that Indias government may put the FDI retail reforms on hold until it reaches consensus within the ruling coalition. Reuters reports that this risked a possible dilution of the policy rather than a change of heart.,,[39][40][41] India Today claimed that the resistance to Indian retail reforms is primarily because it has been badly sold, even though it can help fix the exploitation of Indian farmers by the decades-old "arhtiya" and "mandi" monopoly system. India Today claims the policy is good for the small Indian farmer and the Indian consumer.[42] Pratap Mehta, president of the Centre for Policy Research, claimed any U-turn or postponement of retail reforms will cause an immense loss of face to the Congress-led central government of Manmohan Singh. The mom-and-pop farmers of India support these reforms. The consumers of India want the reforms. The government has already annoyed those who oppose change and innovation in retail. By putting retail reforms on hold, the government will additionally alienate much larger segment of India's population supporting FDI. So they will now have the worst of both worlds, claims Mehta.[43] Deepak Parekh, Ashok Ganguly and other economic policy leaders of India, on 4 December 2011, called placing investment and innovation in retail on hold for the sake of vested interests as unfair and detrimental to vast majority in India. They urged farmers, consumers and the common people to raise their voice against this false drama of apprehension against investment and modernising trade in organised retailing. They called upon Indians to come out and strongly support progressive measures and reforms with the same spirit and gusto with which we take the liberties to criticize policies or issues we do not appreciate. [44] Several newspapers claimed on 6 December 2011 that India parliament is expected to shelve retail reforms while the ruling Congress party seeks consensus from the opposition and the Congress party's own coalition partners. Suspension of retail reforms on 7 December 2011 would be, the reports claimed, an embarrassing defeat for the Indian government, suggesting it is weak and ineffective in implementing its ideas. [45] Anand Sharma, India's Commerce and Industry Minister, after a meeting of all political parties on 7 December 2011 said, "The decision to allow foreign direct investment in retail is suspended till consensus is reached with all stakeholders."[6] [edit]Single-brand

retail reforms approved

On January 11, 2012, India approved increased competition and innovation in single-brand retail.[46] The reform seeks to attract investments in production and marketing, improve the availability of goods for the consumer, encourage increased sourcing of goods from India, and enhance competitiveness of Indian enterprises through access to global designs, technologies and management practices. In this announcement,

India requires single-brand retailer, with greater than 51% foreign ownership, to source at least 30% of the value of products from Indian small industries, village and cottage industries, artisans and craftsmen. Mikael Ohlsson, chief executive of IKEA, announced IKEA is postponing its plan to open stores in India. He claimed that IKEA's decision reflects Indias requirements that single-brand retailers such as IKEA source 30 percent of their goods from local small and medium-sized companies. This was an obstacle to IKEA's investment in India, and that it will take IKEA some time to source goods and develop reliable supply chains inside India. Ikea announced that it plans to double what it sources from India already for its global product range, to over $1 billion a year, within three years. IKEA in the near term, plans to focus expansion instead in China and Russia, where such restrictions do not exist.[9] [edit]Social

impact and controversy with retail reforms

The November 2011 retail reforms in India have sparked intense activism, both in opposition and in support of the reforms. [edit]Controversy

over Indian retail reforms

A horticultural produce retail market in Kolkata, India; produce loss in these retail formats is very high for perishables

Critics of the Indian retail reforms announcement are making one or more of the following points:,[47][48]

Independent stores will close, leading to massive job losses. Walmart employs very few people in the United States. If allowed to expand in India as much as Walmart has expanded in the United States, few thousand jobs may be created but millions will be lost.

Walmart will lower prices to dump goods, get competition out of the way, become a monopoly, then raise prices. We have seen this in the case of the soft drinks industry. Pepsi and Coke came in and wiped out all the domestic brands.

India doesn't need foreign retailers, since homegrown companies and traditional markets may be able to do the job.

Work will be done by Indians, profits will go to foreigners.

Remember East India Company. It entered India as a trader and then took over politically. There will be sterile homogeneity and Indian cities will look like cities anywhere else. The government hasn't built consensus.

Supporters claim none of these objections has merit. They claim:[48]

Organized retail will need workers. Walmart employs 1.4 million people in United States alone.[49] With United States population of about 300 million, and India's population of about 1200 million, if Walmart-like retail companies were to expand in India as much as their presence in the United States, and the staffing level in Indian stores kept at the same level as in the United States stores, Walmart alone would employ 5.6 million Indian citizens. Walmart has a 6.5% market share of the total United States retail. Adjusted for this market share, the expected jobs in future Indian organized retail would total over 85 million. In addition, millions of additional jobs will be created during the building of and the maintenance of retail stores, roads, cold storage centers, software industry, electronic cash registers and other retail supporting organizations. Instead of job losses, retail reforms are likely to be massive boost to Indian job availability.

KPMG - one of the world's largest audit companies - finds that in China, the employment in both retail and wholesale trade increased from 4% in 1992 to about 7% in 2001, post China opening its retail to foreign and domestic innovation and competition. In absolute terms, China experienced the creation of 26 million new jobs within 9 years, post China announcing FDI retail reforms. Additionally, contrary to some concerns in China, post retail reforms, the number of traditional small retailers also grew by 30% over 5 years. [13]

India needs trillions of dollar to build its infrastructure, hospitals, housing and schools for its growing population. Indian economy is small, with limited surplus capital. Indian government is already operating on budget deficits. It is simply not possible for Indian investors or Indian government to fund this expansion, job creation and growth at the rate India needs. Global investment capital through FDI is necessary. Beyond capital, Indian retail industry needs knowledge and global integration. Global retail leaders, some of which are partly owned by people of Indian origin,[50] can bring this knowledge. Global integration can potentially open export markets for Indian farmers and producers. Walmart, for example, expects to source and export some $1 billion worth of goods from India every year, since it came into Indian wholesale retail market.[51]

Walmart, Carrefour, Tesco, Target, Metro, Coop are some of over 350 global retail companies with annual sales over $1 billion. These retail companies have operated for over 30 years in numerous countries. They have not become monopolies. Competition between Walmart-like retailers has kept food prices in check. Canada credits their very low inflation rates to Walmart-effect.[52] Anti-trust laws and state regulations, such as those in Indian legal code, have prevented food monopolies from forming anywhere in the world. Price inflation in these countries has been 5 to 10 times lower than price inflation in India. The current consumer price inflation in Europe and the United States is less than 2%, compared to India's double digit inflation.

The Pepsi and Coke example is meaningless in the context of Indian beverage market. More competition is lacking because of limited demand. Indian consumer has limited interest in soft drinks. Soft drinks represent less than 5% of Indian beverage market.[53] Indian consumer prefers milk-based, tea and coffee and these account for 90% of Indian beverage market. In these markets, Coca Cola and Pepsi have plenty of competition. The next most important market in India is bottled water, that outsells combined soft drink sales of the Pepsi and Coca Cola. Bottled water, milk, coffee and tea market in India are big markets, and have plenty of domestic brands, European brands like Nestle, as well as Pepsi and Coca Cola. Organized retail too will have numerous brands and strong competition.

Comparing 21st century to 18th century is inappropriate. Conditions today are not same as in the 18th century. India wasn't a democracy then, it is today. Global awareness and news media were not the same in 18th century as today. Consider China today. It has over 57 million square feet of retail space owned by foreigners, employing millions of Chinese citizens. Yet, China hasn't become a vassal of imperialists. It enjoys respect from all global powers. Other Asian countries like Malaysia, Taiwan, Thailand and Indonesia see foreign retailers as catalysts of new technology and price reduction; and they have benefitted immensely by welcoming FDI in retail. India too will benefit by integrating with the world, rather than isolating itself.[54]

With 51% FDI limit in multi-brand retailers, nearly half of any profits will remain in India. Any profits will be subject to taxes, and such taxes will reduce Indian government budget deficit. Many years ago, China adopted the retail reform policy India has announced; China allowed FDI in its retail sector. It has taken FDI-financed retailers in China between 5 to 10 years to post profits, in large part because of huge investments they had to make initially. Like China, it is unlikely foreign retailers will earn any profits in India for the first 5 to 10 years.[25]Ultimately, retail companies must earn profits with hard work and by creating value.

States have a right to say no to retail FDI within their jurisdiction.[37] States have the right to add restrictions to the retail policy announced before they implement them. Thus, they can place limits on number, market share, style, diversity, homogeneity and other factors to suit their cultural preferences. Finally, in future, states can always introduce regulations and India can change the law to ensure the benefits of retail reforms reach the poorest and weakest segments of Indian society, free and fair retail competition does indeed lead to sharply lower inflation than current levels, small farmers get better prices, jobs created by organized retail pay well, and healthier food becomes available to more households.

Inbuilt inefficiencies and wastage in distribution and storage account for why, according to some estimates, as much as 40% of food production doesn't reach consumers. Fifty million children in India are malnourished.[48] Food often rots at farms, in transit, or in antiquated state-run warehouses. Costconscious organized retail companies will avoid waste and loss, making food available to the weakest and poorest segment of Indian society, while increasing the income of small farmers. Walmart, for example,

since its arrival in Indian wholesale retail market, has successfully introduced "Direct Farm Project" at Haider Nagar near Malerkotla in Punjab, where 110 farmers have been connected with Bharti Walmart for sourcing fresh vegetables directly, thereby reducing waste and bringing fresher produce to Indian consumers.[51]

Indian small shops employ workers without proper contracts, making them work long hours. Many unorganized small shops depend on child labour. A well-regulated retail sector will help curtail some of these abuses.[48]

Organized retail has enabled a wide range of companies to start and flourish in other countries. For example, in the United States, an organized retailer named Whole Foods has rapidly grown to annual revenues of $9 billion by working closely with farmers, delighting customers and caring about the communities it has stores in.[55]

The claims that there is no consensus is without merit. About 10 years ago, when opposition formed the central government, they had proposed retail reforms and suggested India consider FDI in retail. Retail reforms discussions are not new. More recently, retail reforms announced evolved after a process of intense consultations and consensus building intiative. In 2010, the Indian government circulated a discussion paper on FDI retail reforms.[13] On July 6, 2011, another version of the discussion paper was circulated by the central government of India.[56] Comments from a wide cross-section of Indian society including farmers' associations, industry bodies, consumer forums, academics, traders' associations, investors, economists were analyzed in depth before the matter was discussed by the Committee of Secretaries. By early August 2011, the consensus from various segments of Indian society was overwhelming in favor of retail reforms.[57] The reform outline was presented in India's Rajya Sabha in August 2011. The announced reforms are the result of this consensus process. The current opposition is not helping the consensus process, since consensus is not built by threats and disruption. Those who oppose current retail reforms should help build consensus with ideas and proposals, if they have any. The opposition parties currently disrupting the Indian parliament on retail reforms have not offered even one idea or a single proposal on how India can eliminate food spoilage, reduce inflation, improve food security, feed the poor, improve the incomes of small farmers.

[edit]Opposition

to retail reforms

Within a week of retail reform announcement, Indian government has faced a political backlash against its decision to allow competition and 51% ownership of multi-brand organized retail in India. Despite the fact that Salman Khurshid, Indias law minister, claiming that many opposition parties, including the Bharatiya Janata Party, had privately encouraged the government to push through the retail reform, the intense criticism now targets Congress-led coalition government, and its decision to push through one of the biggest economic reforms in years for India. Opposition parties claim supermarket chains are ill-advised, unilateral and unwelcome.[58]

The opposition claims the entry of organized retailers would lead to their dominance that would decimate local retailers and force millions of people out of work. Mamata Banerjee, the chief minister of West Bengal and the leader of the Trinamool Congress, announced her opposition to retail reform, claiming Some people might support it, but I do not support it. You see America is America and India is India. One has to see what ones capacity is.[59] Other states whose Chief Ministers have either personally announced opposition or announced reluctance to implement the retail reforms: Tamil Nadu, Uttar Pradesh, Bihar and Madhya Pradesh. Chief Ministers of many states have not made a personal statement in opposition or support of India needing retail reforms. Gujarat, Kerala, Karnataka and Rajasthan are examples of these states. Both sides have made conflicting claims about the position of chief ministers from these states. A Wall Street Journal article reports that in Uttar Pradesh, Uma Bharti, a senior leader of the opposition Bharatiya Janata Party (BJP), threatened to "set fire to the first Wal-Mart store whenever it opens;" with her colleague Sushma Swaraj busy tweeting up a storm of misinformation about how Wal-Mart allegedly ruined the U.S. economy.[60] On 1 December 2011, an India-wide "bandh" (close all business in protest) was called by political parties opposing the retail reform. While many organizations responded, the reach of the protest was mixed. [61] The Times of India, a national newspaper of India, claimed people appeared divided over the bandh call and internal rivalry among trade associations led to a mixed response, leaving many stores open day-long and others opening for business as usual in the second half of the day. Even Purti Group, a network of stores owned and operated by Nitin Gadkari were open for business, ignoring the call for bandh. Gadkari is the president of BJP, the key party currently organizing opposition to retail reform.[62] The Hindu, another widely circulated newspaper in India, claimed the opposition's call for a nation wide shutdown on 1 December 2011, in protest of retail reform received a mixed response. Some states had strong support, while most did not. Even in states where opposition political parties are in power, many ignored the call for the shutdown. In Gujarat, Bihar, Delhi, Andhra Pradesh, Haryana, Punjab and Assam the call evoked a partial response. While a number of wholesale markets observed the shutdown, the newspaper claimed a majority of kirana stores and neighborhood small shops for whom apparently the trade bandh had been called remained open, ignoring the shutdown call. Conflicting claims were made by the organizers of the nation wide shutdown. Contrary to eyewitness reports, one Trader union's secretary general claimed traders across the country participated wholeheartedly in the strike.[63] The political parties opposing the retail reforms physically disrupted and forced India's parliament to adjourn again on Friday 2 December 2011. The Indian government refused to cave in, in its attempt to convince

through dialogue that retail reforms are necessary to protect the farmers and consumers. Indian parliament has been dysfunctional for the entire week of November 28, 2011 over the opposition to retail reforms.[64] [edit]Support

for retail reforms

In a pan-Indian survey conducted over the weekend of 3 December 2011, overwhelming majority of consumers and farmers in and around ten major cities across the country support the retail reforms. Over 90 per cent of consumers said FDI in retail will bring down prices and offer a wider choice of goods. Nearly 78 per cent of farmers said they will get better prices for their produce from multi-format stores. Over 75 per cent of the traders claimed their marketing resources will continue to be needed to push sales through multiple channels, but they may have to accept lower margins for greater volumes.[65] [edit]Farmer

groups

Various farmer associations in India have announced their support for the retail reforms. For example:

Shriram Gadhve of All India Vegetable Growers Association (AIVGA) claims his organization supports retail reform. He claimed that currently, it is the middlemen commission agents who benefit at the cost of farmers. He urged that the retail reform must focus on rural areas and that farmers receive benefits. Gadhve claimed, "A better cold storage would help since this could help prevent the existing loss of 34% of fruits and vegetables due to inefficient systems in place." AIVGA operates in nine states including Maharashtra, Andhra Pradesh, West Bengal, Bihar, Chattisgarh, Punjab and Haryana with 2,200 farmer outfits as its members.[66]

Bharat Krishak Samaj, a farmer association with more than 75,000 members says it supports retail reform. Ajay Vir Jakhar, the chairman of Bharat Krishak Samaj, claimed a monopoly exists between the private guilds of middlemen, commission agents at the sabzi mandis (India's wholesale markets for vegetables and farm produce) and the small shopkeepers in the unorganized retail market. Given the perishable nature of food like fruit and vegetables, without the option of safe and reliable cold storage, the farmer is compelled to sell his crop at whatever price he can get. He cannot wait for a better price and is thus exploited by the current monopoly of middlemen. Jakhar asked that the government make it mandatory for organized retailers to buy 75% of their produce directly from farmers, bypassing the middlemen monopoly and India's sabzi mandi auction system.[66]

Consortium of Indian Farmers Associations (CIFA) announced its support for retail reform. Chengal Reddy, secretary general of CIFA claimed retail reform could do lots for Indian farmers. Reddy commented, India has 600 million farmers, 1,200 million consumers and 5 million traders. I fail to understand why political parties are taking an anti-farmer stand and worried about half a million brokers and small shopkeepers. CIFA mainly operates in Andhra Pradesh, Karnataka and Tamil Nadu; but has a

growing members from rest of India, including Shetkari Sanghatana in Maharashtra, Rajasthan Kisan Union and Himachal Farmer Organisations.

Prakash Thakur, the chairman of the People for Environment Horticulture & Livelihood of Himachal Pradesh, announcing his support for retail reforms claimed FDI is expected to roll out produce storage centers that will increase market access, reduce the number of middlemen and enhance returns to farmers.[67] Highly perishable fruits like cherry, apricot, peaches and plums have a huge demand but are unable to tap the market fully because of lack of cold storage and transport infrastructure. Sales will boost with the opening up of retail. Even though India is the second-largest producer of fruits and vegetables in the world, its storage infrastructure is grossly inadequate, claimed Thakur.

Sharad Joshi, founder of Shetkari Sangathana (farmers association), has announced his support for retail reforms.[68] Joshi claims FDI will help the farm sector improve critical infrastructure and integrate farmerconsumer relationship. Today, the existing retail has not been able to supply fresh vegetables to the consumers because they have not invested in the backward integration. When the farmers' produce reaches the end consumer directly, the farmers will naturally be benefited. Joshi feels retail reform is just a first step of needed agricultural reforms in India, and that the government should pursue additional reforms.

Suryamurthy, in an article in The Telegraph, claims farmer groups across India do not support status quo and seek retail reforms, because with the current retail system the farmer is being exploited. For example, the article claims:[67]

Indian farmers get only one third of the price consumers pay for food staples, the rest is taken as commissions and markups by middlemen and shopkeepers

For perishable horticulture produce, average price farmers receive is barely 12 to 15% of the final price consumer pays

Indian potato farmers sell their crop for Rs. 2 to 3 a kilogram, while the Indian consumer buys the same potato for Rs. 12 to 20 a kilogram.[69]

[edit]Economists

and entrepreneurs

Many business groups in India are welcoming the transformation of a long-protected sector that has left Indian shoppers bereft of the scale and variety of their counterparts in more developed markets.[58] B. Muthuraman, the president of the Confederation of Indian Industry, claimed the retail reform would open enormous opportunities and lead to much-needed investment in cold chain, warehousing and contract farming. Organized retailers will reduce waste by improving logistics, creating cold storage to prevent food spoilage, improve hygiene and product safety, reduce counterfeit trade and tax evasion on expensive item purchases, and create dependable supply chains for secure supply of food staples, fruits and vegetables. They will

increase choice and reduce Indias rampant inflation by reducing waste, spoilage and cutting out middlemen. Fresh investment in organized retail, the supporters of retail reform claim will generate 10 million new jobs by 2014, about five to six million of them in logistics alone.[60] Organized retail will offer the small Indian farmer more competing venues to sell his or her products, and increase income from less spoilage and waste. A Food and Agricultural Organization report claims that currently, in India, the small farmer faces significant losses post-harvest at the farm and because of poor roads, inadequate storage technologies, inefficient supply chains and farmer's inability to bring the produce into retail markets dominated by small shopkeepers. These experts claim India's post-harvest losses to exceed 25%, on average, every year for each farmer.,[70][71] Unlike the current monopoly of middlemen buyer, retail reforms offer farmers access to more buyers from organized retail. More buyers will compete for farmers produce leading to better support for farmers and to better bids. With less spoilage of staples and agricultural produce, global retail companies can find and provide additional markets to Indian farmers. Walmart, since its arrival in India's wholesale retail market, already sources and exports about $1 billion worth of Indian goods for its global customers. Not only do these losses reduce food security in India, the study claims that poor farmers and others loose income because of the waste and inefficient retail. Over US$50 billion of additional income can become available to Indian farmers by preventing post-harvest farm losses, improving transport, proper storage and retail. Organized retail is also expected to initiate infrastructure development creating millions of rural and urban jobs for Indias growing population. One study claims that if these post-harvest food staple losses could be eliminated with better infrastructure and retail network in India, enough food would be saved every year to feed 70 to 100 million people over the year.[72] Supporters of retail reform, The Economist claims, say it will increase competition and quality while reducing prices helping to reduce India's rampant inflation that is close to the double digits. These supporters claim that unorganized small shopkeepers will continue to exist alongside large organized supermarkets, because for many Indians they will remain the most accessible and most convenient place to shop. [73] Amartya Sen, the Indian born Nobel prize winning economist, in a December 2011 interview claims foreign direct investment in multi brand retail can be good thing or bad thing depending on the nature of the investment. Quite often, claims Professor Sen, FDI is a good thing for India.[74] [edit]Chief

Ministers of Indian states

Supporters of retail reform who have voiced the need to promote organized retail include Chief Ministers of several states of India, several belonging to political parties that have no affiliation with Congress-led central government of India. The list includes the Chief Ministers of Maharashtra, Andhra Pradesh, Tamil Nadu and Gujarat. In a report submitted earlier in 2011, these Chief Ministers urged the Prime Minister to prioritize

reforms to help promote organized retail, shorten the retail path from farm to consumer, allow organized retail to buy direct from farmers at remunerative produce prices, and reduce farm to retail costs.[75] Similarly, the Chief Minister of Delhi has come out in support of the retail reform,[76] as have the Chief Ministers of the two farming states of Haryana and Punjab in north India.,[77][78] The Chief Ministers of Haryana and Punjab claim that the announced retail reforms will immensely benefit farmers in their states. The Chief Minister of the state of Maharashtra - the state with the highest GDP in India and home to its financial capital Mumbai - has also welcomed the retail reform.,[79][80] Tarun Gogoi, the Chief Minister of Assam, an eastern state in India, announcing his support to the retail reform, claimed "this will go a long way in bringing about a sea change in rural economy. The decision will boost agriculture and allied sectors, manufacturing, logistics, integrated cold chains, refrigerated transportation and food processing facilities in a big way." Criticising the BJP-organized opposition, Gogoi claimed that these parties who had just a few years ago dubbed opening up retail as good for India, are now singing a different tune.[81] [edit]Current

supermarkets

Existing Indian retail firms such as Spencer's, Foodworld Supermarkets Ltd, Nilgiri's and ShopRite support retail reform and consider international competition as a blessing in disguise. They expect a flurry of joint ventures with global majors for expansion capital and opportunity to gain expertise in supply chain management. Spencer's Retail with 200 stores in India, and with retail of fresh vegetables and fruits accounting for 55 per cent of its business claims retail reform to be a win-win situation, as they already procure the farm products directly from the growers without the involvement of middlemen or traders. Spencers claims that there is scope for it to expand its footprint in terms of store location as well as procuring farm products. Foodworld, which operates over 60 stores, plans to ramp up its presence to more than 200 locations. It has already tied up with Hong Kong-based Dairy Farm International. With the relaxation in international investments in Indian retail, Indias Foodworld expects its global relationship will only get stronger. Competition and investment in retail will provide more benefits to consumers through lower prices, wider availability and significant improvement in supply chain logistics.[82] [edit]See

also

Indian road network Agriculture in India Indian expressways Fishing in India

[edit]External

links

The Economist December 2011 issue - Reform in India: Let Walmart in The Financial Times: How to open up Indias economy (2 December 2011) Report on Indian Retail, KPMG 2009 The Great Indian Retail Story - An Ernst & Young Report, 2007 2011 Retail Reform Commentary: Expected impact of FDI in Retail Ernst & Young India Viewpoint The Old Kings... And The New: Indian retail industry is evolving. A report that lists some of the evolution over last 20 years.

http://www.idc-ri.com/getdoc.jsp?containerId=AP9140604T - IDC Retail Insights Report on Indian Retailing and Trends

[edit]References

1. 2. 3. 4. 5. 6.

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7.

^ Sharma, Amol; Sahu, Prasanta (11 January 2012). "India Lifts Some Limits on Foreign Retailers". The Wall Street Journal.

8. 9.

^ Amol Sharma (24 June 2012). "IKEA Knocks on India's Door". The Wall Street Journal. ^ a b "Ikea shelves Indian retail market move". The Financial Times. 22 January 2012.

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