Where does Modi Stand?

Gujarat Chief Minister Mr. Narendra Modi has echoed his party’s line by criticizing the government’s proposal to introduce Foreign Direct Investment (FDI) in multi-brand retail. Mr. Modi has stated that FDI in retail would allow cheaply manufactured foreign goods to be imported in India which will hurt Indian economy. The BJP President Mr. Nitin Gadkari and senior leader Mr. Venkaiyah Naidu expressed identical views.

Since the BJP favors FDI in principle should it not explain in detail to the public why FDI is bad only in retail? It has been argued that it will hurt small retailers. This view has been countered by opponents. Mr. Kishore Biyani, CEO of Pantaloons Retail, has created big investment in retail in West Bengal. He has introduced a novel approach that disproves fears of FDI in retail hurting small retailers.

Mr. Biyani has introduced the franchising system to rope in small retailers and corner shops to sell products supplied by the big retailer. In fact it has been analyzed that the structure of Indian cities and the prevalent shopping culture renders the traditional Walmart model followed worldwide unworkable in Indian cities. Unlike cities in the west and elsewhere shoppers in India do not generally do their shopping by cars on a weekly basis by driving out to a big mall or store far from the city center. They use the corner shop on almost a daily basis. If the big stores institutionalize through a system of franchise for corner shops quality and price control the supply of goods provided to them it would benefit both the big hub store and the small retailers. This experiment is showing promising results for Pantaloons in West Bengal. Why cannot the BJP discuss and if necessary amend the government’s policy to ensure that farmers, small retailers and consumers can all benefit from FDI in retail?

This is especially desirable because BJP is bending over backward to attract FDI in other sectors. For example, last July Mr. Narendra Modi visited Japan to confer with Suzuki Chairman Mr. Osamu Suzuki to discuss investment opportunities in Gujarat. He visited the Suzuki plant. Mr. Osamu Suzuki assured Mr. Modi that he would bring more industrialists to Gujarat. It was decided that Suzuki would train 500 Indian workers in its work culture before they are deployed in Gujarat. Reciprocating Mr. Modi’s visit the Suzuki Chairman in August along with the company’s Indian head called on Mr. Modi’s residence in Gujarat. Mr. Suzuki told reporters: "I came to thank Mr. Modi because he visited me in Japan, and I came to India to attend AGM of Maruti."

What the media was not told is that during their interaction Mr. Modi requested that all the ancillary parts of Maruti be also manufactured in Gujarat. The Suzuki Chairman was not averse to the idea in principle but sought terms. Mr. Modi assured him 100 percent FDI in all the plants to be set up by Suzuki in Gujarat.

That by any standards is a strong pro-FDI policy. There is nothing wrong with that. But does it square with the BJP’s general approach to the government’s initiative for FDI in retail? If it is only retail trade that is the party’s bugbear it should clarify that and endeavor to iron out differences instead of projecting wholesale opposition to FDI.

If my information about Mr. Modi’s offer of 100 percent FDI to Suzuki ancillaries obtained from reliable sources is incorrect let him publicly deny that he stands by that offer made to Suzuki. If he does that I will know the real situation. Suzuki also will know the real situation. Let Mr. Modi speak up and tell the nation where he stands. Mere posturing for elections does not indicate responsible opposition.

Read also: BJP Stupid or Sold Out?

25-Sep-2012

More by : Dr. Rajinder Puri

Top | Analysis

Views: 3374 Comments: 2

Nothing is true from what Mr. Rajendra Puri says in the first paragraph.
FDI is not good in retails in India for the same reason for which Germany kicked out WALMART. Mr. Rajendra should spell out how Walmart/FDI
benefits retailers and How Indian retailers cannot. Indian big capitalist can do
better than Pantaloons given hard working Gujaratis and Marwadis talent.
Mr. Narendra Modi went to Japan and invited auto industries, manufacturing
industries and not the retailers , small or big/Walmart.He invited industrialist
and not the retailers small or big/Walmart. Mr. Modi's policy is certainly
PRO-FDI. But views and policy differs to serve the purpose. Mr. Modi, I am
sure, will certainly iron out the difference provided present UPA-2 government
invites him with a clear mind to agree where it can. Mr. Modi will stand by
what he said publicly. FDI is good and bad. It depends upon psyche of the
person who directs the policy. BJP is neither stupid nor sold out. BJP is second major political party in the nation. Should it not be supported?

Pranlal Sheth
27-Sep-2012 00:45 AM

Sir,

A very balance article, like a bullet shot in wind finally hitting "bull's eye".

Modi must explain - and people must know the backgrouod irrespective of whether Mr. Modi provides explanation or not.

A probable "political" explanation can be - "the FDI in retail is different than an FDI in manufacturing industry - it's different !"

Dinesh Kumar Bohre
26-Sep-2012 04:37 AM

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