The marketplace has always been at the heart of India–exuberant bazaars brimming with local hawkers and traditional wares and foods. But the country’s old-fashioned markets may soon be eclipsed by the towering “free market” of globalization, as multinational superstores push the government to open the gates.
Under new regulations, retail giants such as Wal-Mart, Carrefour and Tesco, long barred from selling directly to Indian consumers, will now be permitted to own a majority 51% stake in joint operations with a local partner. So-called single-brand retailers, the likes of Apple and Ikea, can own 100% of their stores, up from 51% previously. Both kinds of stores will have to source nearly a third of their goods from small and medium-sized Indian suppliers as well as confine their operations to 53-odd cities with a population over one million.
Indian consumers also tend to buy groceries in neighborhood shops. Organized retail operations — professionally managed chains, as opposed to family-owned independent stores — account for just 5 percent of the retail market, according to the Associated Chambers of Commerce and Industry of India.
“It’s a country in which infrastructure is not fully developed,” said Rajagopalan. “For any individual to travel to a large store is not the easiest of things.” Political pressures remain. Shops and markets across India were shut today as traders supported a daylong strike demanding the government scrap its decision on foreign investment. States have a say in allotting licenses and West Bengal may not allow foreign investment in retailing, Chief Minister Mamata Banerjee said in televised comments Nov. 28.