Opening Retail - The Multiplier Effect

Much had been spoken about the opening of the retail sector in India in the context of President Obama's recent visit of India.
There has been a lot of speculation on the opening of the sector and whether there has been a quid pro quo with the United States on doling out defence deals and broad agreements on geopolitical issues in return for India easing restrictions on entry of the so-called big retail.
I believe that is the case. Gradually, the controls will be eased, just as what happened in the insurance sector.
But opening of retail has been a political hot potato. The communists oppose it in the name of ideology while elements on the centre and right oppose it simply because the Marwaris and Banias form their support base and have always been a source of their funding. These communities have been in the trade for centuries.
Let's put it simply - there is a reluctance to challenge the present paradigm.
Big retail will seek to achieve economies of scale not only on the consumer end but also on the sourcing side. That would necessitate bulk sourcing which would also translate into some element of discounting for the end consumer.
In short, the consumer would benefit from the lower prices and also a wider range that the neighbourhood bania cannot offer.
Opening retail would bring with it a whole host of opportunities for the not so well educated youth. Organised retail will hire big time for logistics, sourcing, security and manning the stores. And the youth will have a grand opportunity to pick up some skills and who knows, some opportunities for entrepreneurship in the future.
Vendors will have an opportunity to directly sell to the retail chains bypassing middlemen.
Organised retail has to develop and evolve logistics solutions including cold chain solutions to ensure fresh produce reaches the markets. This would trigger the much n investments in logistics solutions, warehousing, transportation, repair and maintenance which would lead to entrepreneurship opportunities.
Clearly opening of retail has multiplier effects on the economy.
But does this mean that it would be the end of the road for small retail?
Certainly not!
Models of hub and spoke in retail trade, involving, say a Walmart and a network of neighbourhood retailers can be thought of. That way it is a win-win for all. Traditional retailers stay in business while Walmart increases its footprint.
In short, opening retail should not be a political hot potato. Instead, it would have multiplier effects on India's GDP, in the long term.

An "On Top Of The World" Break!

A week before Diwali, Neeti and I, took a much needed break from this mad-mad-mad Bombaypolis.
We packed our Dreamliner, headed out to Panchgani-Mahabaleshwar, 250 kilometers away, early that Saturday morning.
The drive was a breeze, the air crisp and refreshing, the 80s-music great, the mood, undoubtedly, on top of the world.
Some snapshots of the reprieve from the hypertension of Bombay are here for you to see.

There's always light at the end of the tunnel!!!

Amazing Banyans at Wai!

The final leg - getting a high!!!!

My idea of relaxation!

Magnificent Silver Oaks at the Prospect!

Strange ways of this world - A holiday for us means work for him.

And gently flows the Krishna!

A fiery sunset!

Our cottage!

The Sun plays hide and seek!

The Prospect stands tall, 98 years on!

Stand tall, stand firm!

Coffy for anyone?

Silence, despite the cacophony of the crickets!

Do 50,000 jobs today, matter?

This was so familiar.
During his visit to India, President Obama behaved like a super smart, manipulative college lass who uses the boys who swoon over her to her advantage, get them to do her homework, assignments, etc.
It is indeed true that Manmohan Singh swoons over America. Indians do admire the United States.
So his speech in the Central Hall of Parliament which was liberally peppered with references to our mythology, freedom struggle, Gandhi, Ambedkar, Chandni Chowk and a lot more was meant to sound like music to Indian ears.
The references to India's emergence as a great power were tailor-made to sweet talk India into doling out business deals.
That seems to have worked very well for Obama. Besides the deals signed by SpiceJet and Reliance Power, the press had been receiving selective leaks suggesting that POTUS' sales trip was immensely successful.
A blog on Indian defence, LiveFist, authored by a well-informed defence journalist, Shiv Aroor, recently reported that the Indian Air Force is buying an additional six C130J Super Hercules transport aircraft.
Instead of the publicly announced order for 10 C-17 Globemaster III aircraft, the Indian Air Force may just end up ordering 17. Similarly, the Indian Navy could order a few more Boeing P-8I Poseidon maritime reconnaissance aircraft.
The bottomline is that we have gifted the United States over 50,000 jobs. The salesman-in-chief, POTUS, would now expect a reasonable bonus, read: a re-election!
But 50,000 jobs do not matter for India, neither do 100,000 jobs, or for that matter 1,000,000 jobs.
What matters is whether we are able to extract the right leverage from the United States.
It is certainly true that Obama's long-winded sales spiel in Parliament does not mean anything for India. We do not need his stamp of approval to get into the United Nations Security Council. We cannot rely on the United States to solve our regional security issues, afterall the United States is no headmaster to punish an errant Pakistan. It's our job to teach the Pakistanis a lesson.
How we would get the right leverage in the United States is clear. The United States has been asking Indian corporates for investment, which was explicit in the recent visit of President Obama.

It would not matter much for India if Mr. Ratan Tata would get Jaguar Land Rover to set up a plant in Detroit or Mr. Mukesh Ambani setting up a refinery on the Gulf of Mexico.
Increased corporate investments would lead to increased transfer of technology and know how. That also has an unintended but useful consequence in the form of penetration of lobbies in Washington. Undoubtedly lobbies help, Israel has shown that well. That is the leverage we need - the ability to influence policy when so desired. That should be the strategic objective.
That means we are in it for the long haul. So 50,000 or 100,000 or even 1,000,000 jobs do not, do not matter at all in the immediate future.

Salesman of the Year - POTUS!

The POTUS landed here today. And the POTUS came along with the FLOTUS.

I am not talking about any spacecraft. I am talking about the President of the United States and the First Lady of the United States.

Just before 1 PM, the Air Force One touched down at CSI Airport, with the salesman of the year, Barack Obama.

It appears after the Republican Tea Party routed him in the American mid-terms, he has no option but to show some action.

What better way than to fly down to the new El Dorado, India, selling his wares and contemplate the defeat by the Tea Party over a warm cup of tea at the Taj Mahal Hotel! (The Taj does serve very good tea, my personal favourite is Assam tea, though, I am told Darjeeling is equally good!)

Let's accept it, that the American economy is on a downslide. That's what cost him a mid-term.

Today, Obama has no option but to become a roving salesman for America Inc.

He does not love India the way Dubya Bush did (that was a mutual love affair!!! I miss Dubya a lot when it comes to United States - India relations!), but it is money, it is business that speaks.

China will not import volumes from the United States. Europe is half-dead economically. The rest of the word has insignificantly small long term potential. That leaves only India in the reckoning. If business with India increases, so will jobs in the United States. That is what forces him lift curbs on transfer of dual-use technologies to India. That's what prompts him to make a pitch for hi-tech exports, nuclear technology, defence deals, aircrafts and you name it, its on sale!!!

It is a game, we need to play it well to get the best from the United States. We have to make the United States dependent on exports to India to force them into a strategic partnership, that helps us stand up as a counterweight to China's quest for dominance in Asia as well as quelling Islamic extremism.

POTUS' visit rings a bell - remember when Bill Clinton was forced to write back sanctions on China for economic reasons?

So far, salesman POTUS has done a decent job, now it is turn. But without doubt, POTUS is the salesman of the year, he wins the award hands down.

Bombaypolis Moments.... Part 10

A view of Worli from Bandra Reclamation!!!

Sunset at Carter Road!

A lovely view, at Carter Road!

The stray chills out at Carter Road!

My doctor's calender says it so rightly!

"Oops, I just pee'd!!!"

Lokhandwala Pizza Hut doesn't even a proper complaint book. Yum! seems to have awful standards in India!

Terminal 1C at CSIA is breezily smooth! Imagine how a little common sense made all flights take off on time!

A rain-kissed view of Juhu beach...

This is the best view of the Monsoons - bright, vibrant colours, with dark clouds adorning the horizon!