Is India Ready For the Retail Revolution?

The powerful voices opposing Wal-Mart’s entry points to the fact that in all the countries where Wal-Mart has set up shops it has put other retailers out of business and has driven down wages. There are numerous reports certifying the economic and eventual social and environmental slow down that could crop up when Wal-Mart “comes to town”.

Wal-Mart on an average will employ 10 per cent or less of the manpower required to do a rupee of turnover, compared with the present, ‘inefficient’ supply and retailing chain. Yet, we, the reform-focused India, have intentionally decided to embrace this ‘efficient’ way of doing business. It’s only if that increased requirement of cheap goods gets sourced within India and the consumption goes up sharply, the increase in employment will occur.

Retailing in general and Wal-Mart in particular may not seem like a bad idea to a country that has woken up to the global market. Loads of Indians see this issue as being unnecessarily politicized to pacify certain political constituencies. It is believed that the emergence of an organized retail sector will create a huge market leading to greater demand.

Whatever is the debate, but it’s very clear that Wal-Mart is all set to enter India and there is no escape from situations like corporate interest vs. interests of small producers, free trade vs. protectionism. As a replacement for contemplation which is needed to arrive at policies that will make not just Wal-Mart but also other retail giants sensitive to the local conditions, smaller businesses, labor conditions, environmental regulations and so on. It still remains to be seen how the retail giants will balance their profit-making mission with responsibility and accountability.