India FDI Watch

As you know, Walmart is now in India. But Walmart is bad for small scale producers and retailers, which are the backbone of the great Indian economy. Like the Goa chief minister Manohar Parrikar said,  “In India too, [Walmart] will kill the small scale producers.”

Walmart is also one of the most corrupt corporations in the world. Last year a New York Times story revealed how Walmart bribed and corrupted officials at all levels of government in order to enter Mexico. According to the article, “The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.”

A big corporation “using bribes to subvert democratic governance” is the last thing India needs now, while citizens, civic leaders and even some politicians are working to make the government less corrupt. Between a corrupt Walmart and a corrupt government there is certainly illegal conduct happening or going to happen that will help the corporation and hurt India.

The good news is we can stop it. Did you know that you can make money from exposing Walmart corruption in India? The Foreign Corrupt Practices Act (FCPA) prohibits bribery of foreign officials by major American and foreign companies. Whistleblowers who report violations can recover a large reward for exposing FCPA violations. For example, if you expose a bribe for a new investment worth one crore, you could win ten to thirty lakh. All you need to do is to click www.walmart-corruption.com.

Share this page with your family and friends, and let them know that they can help stop corruption in India. And you just might win some money too! Let’s keep corruption out!

The Hawkers Joint Action Committee meeting held on 21st April, 2013 at the Sindhu Samaj Hall, Karolbagh unanimously decided to form fronts of Women and Minorities.

Md. Sayed, Hawkers representative of Badarpur Market and resident of Daryaganj was elected as convenor of the Minority Front.

Ms. Sushma, a member of the Zonal Vending Committee of North Delhi Municipal Corporation, Hawkers representative of Karolbagh and resident of Nawada, Dwarka was unanimously elected as Convenor of the Women Front of the Hawkers Joint Action Committee.

More than 100 hawkers representatives who participated in the meeting discussed issues including of newly elected Hon’ble Mayors and Standing Committee Chairpersons in all the three municipal corporations of Delhi. A detail discussion took place on the Food Safety and Standard Act and required interventions by Food vendors.

Hawkers Joint action Committee also decided to actively participate in the forthcoming national convention on FDI in Retail.

Please check out audio from India FDI Watch Director Dharmendra Kumar’s interview on New Zealand public radio.

Please check out FDI Watch audio on German radio documentary on superstores invasion in India.

January 24th, 2013

The Minister meets Walmart CEO

Here is the official statement by Govt of India:

“Mr Doug McMillon, CEO Walmart International met Union Commerce Industry and Textiles Minster Shri Anand Sharma at Davos today and conveyed that Walmart is `excited about India’ and they are studying the conditions before making the final announcement.

Shri Sharma said that India’s Policy on FDI in Multi Brand retail has finality and they need not be unduly concerned about any policy reversal. Shri Sharma also asked them to send request for clarification, if any, in the written form to his Ministry. All necessary clarity will be provided, assured Shri Sharma.”

Anger Grows

Swedish furniture manufacturer IKEA is the latest retail store set to expand into India. The government wants to attract much-needed infrastructure – while many shop owners fear for their livelihood.

Praveen Khandelwal’s hardware store in Delhi employs some 15 people. But soon, the shop owner fears, they might all lose their jobs – and with it, their livelihood.”International companies will grab the entire retail trade,” Khandelwal told DW. He is afraid that there will be no room for small-scale retailers like him. “Foreign companies will rule India!”

For a long time, India had very restrictive rules on Foreign Direct Investment (FDI). But in the last couple of years, restrictions have been loosened. In June, 2012, the government made some changes to its policies, allowing foreign retailers to operate with less restrictions in the country.

This, according to Gareth Price, a Senior Research Fellow at the British think-tank Chatham House, was aimed at building up much-needed infrastructure in particular in the agricultural sector. “India’s supply chain management is very poor. A lot of food is wasted before it even reaches the shops,” Gareth told DW. India, he added, lacked the resources to improve its infrastructure – the reason the ruling Congress Party decided to open the country to foreign investment.

Several foreign companies, including Wal-Mart, were quick to set up shop following the liberalization.

Highly divisive policies

In November, the government went even further, allowing for full ownership of local subsidiaries by foreign companies. Previously, foreign ownership had been limited to 51 percent.

Furniture manufacturer IKEA is the latest international retailer set to expand into India. On Tuesday, January 22, an Indian Commerce Ministry official said that the Investment Board had approved the Swedish company’s 1.9-billion-dollar investment proposal. IKEA announced it planned to open 25 stores in India over the next 15 to 20 years. The Cabinet, however, has yet to approve the bill and some Members of Parliament have already voiced their opposition. The opposition BJP party said that it would reverse the decision after the next elections, Price from Chatham House said.

The issue of foreign investment is highly divisive. Many Indians, Price said, fear that hundreds of thousands of jobs might be lost in the retail sector, one of the biggest employers in India.

“They will spread”

Dharmendra Kumar is one of them. “We’re not so concerned about IKEA,” the social activist with India FDI Watch, told DW. “They only make furniture, they won’t have much impact.” But he is concerned that while so far only a minority of India’s states have passed the FDI laws, others may soon follow suit. “And once they get here, they will spread.”

It was only a matter of time, he added, before foreign companies would start to have an impact on supply chains, dictate prices and force small- and medium-sized producers out of business.

With a little help from abroad

Amita Arora Puri from the All India Artisans and Craftworkers Association takes a less bleak view: IKEA with its “unmatched funds and global expertise” could help local artisans and traders to improve their designs, product quality and production abilities,” Puri told DW.

“The domestic private sector is looking for intellectual property of how foreign firms are doing things,” Price agrees. He added that, given India’s red tape and often excessive bureaucracy, foreign companies might find it hard to operate in India, letting the domestic sector take over. “That would seem a perfectly plausible outcome in the retail sector.”

Or, in one Twitter users’ laconic words: “50 percent of Ikea’s sales in India will be to furniture manufacturers who want to steal their designs.”

But Price doesn’t think that many foreign companies will commit themselves to India just yet, given the political opposition to the liberalization move. After all, he told DW, the opening was “reversible.”

Shop owner Praveen Khandelwal, for one, isn’t planning to wait and see. He wants to take his fear to the streets. “We’re working on a campaign against the foreign retailers,” he told DW, referring to a group of shop owners and retailers. “Just wait.”