India's protectionist shopping spree
Like China, India, too, is on a shopping spree. But whereas the Chinese allow half of the world's 70 top retailers to set up shop, India won't allow any. Instead, glittering Indian-owned malls sell almost everything that can be bought in Singapore, Dubai and London, as well as more and more foreign goods - from cars to shirts - made under franchise.
This new trend is marked by the Shoppers' Stop chain of stores, Calcutta's South City shopping and living development, and Mumbai's 20,000 sq ft HyperCity, India's first western-style supermarket.
Until socialist controls were clamped on in the 1950s, India's grand department stores, modelled on London's Harrods, encouraged a subtle snobbishness. But shorn of glamour, shopping dwindled into a necessity served by modest, family-owned stores, hawkers and wet markets.
All that is changing. Given his free-market philosophy, Prime Minister Manmohan Singh would probably like to give foreign retailers free entry. Wal-Mart, K Mart, Ikea and British provision chain Tesco are eyeing what promises to burgeon into one of the world's biggest markets. Already estimated at an annual US$258 billion, retail sales are expected to rise to US$415 billion in four years. India's average annual growth of almost 8 per cent since the mid-1990s has brought prosperity to many people, and not just those in the biggest cities. The two-thirds of 1.1 billion Indians who will be aged between 14 and 65 by 2010 are expected to be avid buyers of everything advertised on TV screens or in glossy magazines.
But the 60 or so Left Front MPs, on whom Dr Singh's coalition government depends for votes, will not hear of foreign retailers. One fear is that they would cause massive unemployment. Another is that imported luxuries would corrupt simple tastes.
Even so, the malls are booming. Politically, they reconcile a lingering faith in socialist austerity with the now-open liking for capitalist consumerism. Socially, they are more than shopping centres. Marble floors and walls, gushing fountains and chilling air-conditioning make them palaces of leisure for people who live in congested tenements and work in dingy offices.
HyperCity and Shoppers' Stop belong to the Raheja family, which has a US$232 million property empire. Tycoon Sunil Mittal, with interests ranging from farms to phones, is bringing in Tesco. Reliance Corporation's even more prominent Mukesh Ambani will invest in 800 stores.
Indigenous sellers make foreign luxuries acceptable. Shoppers' Stop, for example, stocks the entire Mothercare range of parenting products. Another shop sells 300 lines from the British supermarket chain Waitrose. Western brands are not unfamiliar in India. Official emphasis on import substitution actually kept them alive. Everyone knew that the local Capsico sauce copied the unavailable Tabasco's taste, colour and packaging.
The originals are now within reach. While high prices (a 40-per-cent mark-up is usual) do not deter buyers, mall owners are politically influential and generous to all parties, irrespective of ideology.
In fact, they sometimes seem less than enthusiastic about Dr Singh's free-market policies: in the short term, big business flourishes in a closed market. What remains to be seen is how the malls will cope with Indian snobbery. Cross pens and Arrow shirts lost some of their cachet when they began to be made in India.
When writer Sir Vidia Naipaul made one of his characters declare she was 'craze for foreign', he was describing the drive behind India's reforms. Production under franchise, and sale under local auspices, may not always satisfy it.
The author is a former editor of The Statesman in India
