Wal Mart is Coming to India

veg market

Recently the Indian government announced that foreign investment would be allowed in the retail sector, and, after some debate, the relevant legislation was passed by the Parliament and is now the law of the land. This means that  stores like Wal Mart , IKEA and other supermarket chains will start operations in India. What does this mean for Indians particularly with regard to food? There is reason to believe that farmers would benefit as stores now start competing for their produce;  productivity gains are expected as less food is wasted due to improved refrigeration and storage and the consumer is also expected to have a more enjoyable shopping experience at, hopefully, affordable prices.

It is uncertain what the new policy will mean in terms of jobs. The jobs generated by the supermarkets would require a different skill set from those possessed by the small holder farmers and small traders who would be most vulnerable to the coming changes. And what about the little corner stores and produce stands that currently dot the landscape? Certainly, some small stores will go out of business, that is inevitable. However, in matters relating to food, emotions  are just as important as data. Many people enjoy chatting with their neighborhood store owner as they get their shopping done. They also enjoy little conveniences, like free home delivery even with small orders or some credit at the end of the month when finances are tight. For every middle class consumer who is looking forward to shopping at the supermarket, there is one whose income would not stretch that far. And going by the popularity of farmer’s markets in the US, for example, the small farmer will still have the option of setting up his wicker basket of vegetables  on the sidewalk.  And even the supermarkets might have to think about adapting to local customs: China’s indigenous grocery chain RT-Mart wins out in part because it lets customers come in and choose their fish live (it is then processed for purchase) as they have been used to doing at their neighborhood stores for centuries!

So, the outcome of this new policy is far from clear.We will be following how this change works out.

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