SINGAPORE – After years of debate, India’s government recently announced that will open the country’s retail sector to foreign investment. The move was met with howls of protest from those who argue that the entry of large hypermarket chains like Carrefour and Walmart will devastate the small shops that currently dominate India’s retail sector. A country-wide strike called by opposition parties on September 20 brought many cities and towns to a halt. So far, Prime Minister Manmohan Singh’s government has not relented, despite the loss of support from a key coalition ally.
The debate around opening the retail sector to foreign investment is currently being framed, on the one hand, by the need to modernize supply chains and, on the other hand, by the desire to protect small shopkeepers’ livelihoods. Those who support the decision argue that India’s supply chains are simply too wasteful, and that only the finance and knowhow of big, international retail chains can upgrade them. Opponents point to how big retailers decimated the traditional retail segment in the West.