New Delhi, India - In November 2011, when the UPA government announced that it had cleared the entry of big retail chains such as Walmart and Tesco into India through 51 per cent Foreign Direct Investment (FDI) in multi-brand retail, it justified the decision saying that FDI in retail would boost food security and benefit farmers' livelihoods.
But the assurance that FDI in retail would ease inflation did not resolve the political crisis the government was facing; it deepened it. Parliament was stalled for several days of the Winter Session, after which the government was forced to withdraw its decision.
The story of FDI in retail goes back to 2005, when Prime Minister Manmohan Singh signed an agriculture agreement with the US, along with the nuclear agreement. On the board of the US-India Knowledge Initiative in Agriculture, as it is called, sit Monsanto (the world's leading producer of GM seeds), ConAgra (among the world's biggest agribusinesses, along with Cargill) and Walmart (the world's largest retail giant).
Protests had prevented Walmart's entry into retail, but, in 2007, it did get a backdoor entry through a joint-venture with Bharti (their stores go by the names of Easyday and Best Price Modern Wholesale). No back-end infrastructure has been built so far, one of the other claims of the government about why we need retail giants.
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The way the UPA government tried to ram through the decision on FDI in retail - without consulting the opposition parties, or even its allies - was clearly undemocratic. But the decision itself was also flawed. It illustrated a disconnect between an ideology based on market fundamentalism - which is the leaning of the present government - and the Indian reality of small farms and small retail. More
