Modi nuances position on FDI in retail
BJP Prime Ministerial candidate Narendra Modi did some subtle nuancing of his party’s position on FDI in retail, suggesting that were the BJP to come to power, it may not go out of its way to stop foreigners from setting up shop in India. Given that Parliament had given its nod to the proposal—with a rider that states were free to accept or reject it in their individual domain—it was always going to be difficult for the BJP to overturn the law. Yet, if the government is hostile, few are likely to invest in a sector. So, it came as a relief when, at a traders’ meet in the capital during the election campaign, Modi had side-stepped the question of FDI and, instead, asked kirana shops to face the competition using e-commerce. While it was never clear how kiranas were to get competitive using e-commerce, Alibaba’s proposed IPO—likely to be the biggest tech IPO ever in the US—makes it clear it is e-tail that is going to be the big disruptor in the near future, perhaps even more than bricks and mortar retail. The BJP’s strident anti-FDI-in-retail statement in the manifesto, however, came as a dampener.
Which is why it is interesting, that in his interview to Times Now, Modi has tried to nuance the position once again. When asked about FDI in retail, he argued that governments were not run on the basis of flip flops. You can’t have one decision being taken by one party and then overruled by another—investors, he implied, invest in countries, not in governments; the surest way of spooking investors is to frequently change policies, more so in a country where the stability of coalitions is always a matter of chance.
Though Modi’s position on the hard anti-foreign investment line taken by the likes of the Swadeshi Jagran Manch is well-known, he did well to repeat it, though couching it in very neutral terms. The RSS and other such organisations, he said, were interested in the welfare of people and there can be no dispute with this line of thought. While investors, and journalists, have tried their level best to get Modi to clearly spell out his views on subsidies, his talk of how the poor have the first right on the treasury has them confused. The run-up to the elections is not the best time for extreme clarity on such matter, but the fact that farmers in Gujarat are paying a higher price for electricity does send out its own signal as to the direction in which subsidies will go.