The new India?

The dominance of multi-national companies (MNCs) and retail giants in the UK and other western countries is now so well established that it is easy to forget what life was like before they had such a monopoly. Having spent five months working at Barli in Indore, I have been immersed in a society where small scale retail is still prevalent. However, India has reached a turning point and has become one of the most attractive opportunities for both domestic and foreign investment in the retail area. This is posing some important ethical questions to consumers in India and these choices look set to be critical in shaping the future of India’s economy.

Despite their best efforts, huge MNCs such as Wal-Mart have yet to establish themselves in India’s retail industry; presently it is home-grown organisations like Reliance and ITC that are pushing their weight around in the retail market. This has been particularly noticeable over the last year or so, as Reliance has opened a vast number of branches of their new Reliance Fresh supermarkets throughout various locations in India with six branches in Indore alone. Their stores deal in both packaged products and fruits, vegetables and dairy products. Their ethos is notable: by dealing directly with farmers and producers they can assure quality and low prices for consumers while maintaining a steady source of income for the farmers. In reality they are tying the hands of the farmers to make sure Reliance themselves have a steady source of produce at a predetermined price while at the same time eliminating any intermediaries such as wholesale dealers and vendors.

The main concern is that price undercutting will drive away consumers from the smaller retailers and vendors that have become such a significant part of the Indian economy and eventually remove any need for the good majority of them altogether. Once the bigger retailers have a firm enough hold on the market they may then be able to raise prices by as much as they wish. The problem in India is that retail is very fragmented, which means that if highly organised, efficient retailers enter the market significantly, they will displace a disproportionately large number of jobs from the unorganised sector. This is particularly the case if they are not limited on the number of branches they can open in any one place or on the floor space of individual branches.

The initial impact of the new stores was, in many places, significant. Chennai was one of the first places to accommodate new branches of Reliance Fresh and the huge wholesale market in Koyambedu initially reported a 40% drop in sales along with a reduction in the number of small traders visiting the market to procure produce. Not only will there be social problems, but the increase in the use of plastic food packaging and plastic carrier bags will add enormously to the problem of waste disposal in a country whose infrastructure for dealing with it is barely sufficient.

It could be said that India has had the advantage of witnessing the social and environmental degradation caused by large companies expanding their monopoly on retail in the west, and is therefore in a position to act while they still have the chance. There have already been numerous incidences of resistance in various states in India, including organised boycotts, violent and non-violent direct action and the introduction of government legislation, all aimed at limiting or preventing the entry and expansion of large-scale retail. During the first month of my placement in Indore, supporters of the BJP protested against the opening of Reliance Fresh by ransacking one of the city’s branches.

It seems inevitable that these companies will increase their presence over time. The government will have to be strict about enforcing limiting policies if they are to have any control over it. In my local community in Indore I got the impression that people are very much aware of the issues, and generally make educated decisions about how and where they shop. However, it is the burgeoning middle class that is fuelling the growth of large retailers in India, attracted by the slick air-conditioned showrooms and the convenient and hygienically-packed produce on offer. It could be argued that there is nothing wrong with this, but from my experiences, the quality, value for money and level of service I received from small retailers and street vendors was, on the whole, far superior. Supermarkets are able to sell fresh produce at such low prices because of their efficient supply chain and their ability to buy in bulk, but it is their imported and highly processed goods that are regarded as expensive and only affordable to the richer classes. This is a reason for consumers to assess the true cost of discount prices and convenience.

Outside of the cities, in the smaller towns and villages, farming is still a very significant source of income which provides for the local communities. But even Reliance has attempted to enter that market by delivering packaged goods to villages. Once again however, they were met with opposition.

A big part of the work of Barli institute is to teach the trainees the importance of environmental conservation and the sustainable use of their environment and natural resources. It aims to empower them with the skills necessary to provide for their own health and well-being and that of their families and communities. They help maintain knowledge of traditional methods and practices within the communities of the people who need it most. During my placement I spent some time working with the staff and trainees to help propagate and maintain crops within the grounds of the institute; it was incredibly satisfying to see the results of hard work flourish over time. Most importantly, all of this work is done out of necessity because the institute aims to be almost completely self-sufficient. Only produce that is uneconomical or unfeasible to produce is sourced from outside (e.g. cooking oils and rice). Solar cooking technology has become so well established and understood at Barli, there is now very little reliance on firewood or gas at all.

Other practical training at Barli includes cutting and tailoring of clothes. This is very empowering because it gives the trainees the opportunity to provide and maintain their own tailored items, generating a sustainable source of income for their community.

Being at the institute has helped me to further appreciate how much convenience is taken for granted by consumers in the UK. If people want to change their consumer habits for the better then there is a lot we can learn from the simple but honest lifestyles still prevalent in rural India. It has also encouraged me to learn the skills that have disappeared in the majority of people in the UK, and increased my confidence to become more practical.

I’m now thinking about how I can reduce my dependence on products and services from other people and companies. Although this is not the antidote to mindless consumerism, becoming more independent, skilled and practical, and less of a consumer, is ultimately the most ethical choice one can make.

Iain Hughes