The people of the Indian state of Rajasthan are speaking out against foreign corporations like Wal-Mart being able to directly invest in supermarket chains. One of the major political parties in that state opposes foreign direct investment because of the impact it would have on smaller merchants. This sounds a lot like what we here in America have been saying about chain stores and their effect on main street.
For years now, Wal-Mart has been trying to make inroads into India only to have come up short.
As this New York Times article from October of 2013 mentioned:
Wal-Mart’s problems in India extend well beyond the government’s procurement rules. The Indian authorities are investigating whether Wal-Mart violated foreign investment rules by giving Bharti Retail an interest-free loan of $100 million that could later be converted into a controlling stake in the company. Both companies deny wrongdoing.
Last November, the joint venture between Wal-Mart and Bharti suspended several senior executives and delayed some store openings as part of an internal bribery investigation, one of a series of bribery inquiries that have shaken Wal-Mart’s international operations. In June, the joint venture replaced its chief executive.
In the end Wal-Mart decided to walk away from the joint venture with retailer Bharti. But that doesn’t mean they’ve given up on India entirely. There are also other large retailers like the UK’s Tesco who are seeking new market share in the country. Eventually I’m sure that the local governments of states throughout India, will see foreign direct investment as necessary for economic development. But it is my hope that they will negotiate deals on their terms that won’t hurt the smaller independent businesses in their states. I would also hope that they take labor and environmental issues into consideration when negotiating with foreign investors too.