All posts for the month January, 2014

Bayer Boss Says Cancer Drug Not For Indians…

Published January 25, 2014 by vishalvkale

Statement by Bayer’s chief executive – Times Of India

“India’s controller general of patents angered Bayer in March 2012 when he authorized a local drugmaker to produce a generic copy of Nexavar, saying the German company charged a price that was too costly for most Indians.

We did not develop this medicine (Nexavar) for Indians,” ​Marijn Dekkers said at a little reported pharmaceutical forum last month, according to the January 21st edition of Businessweek.

We developed it for western patients who can afford it,” Dekkers said, and called the Indian regulator’s action “essentially theft”.

Bayer said the statements attributed to Dekkers were accurate and forwarded written comments made later by the German chief executive seeking to explain his remarks.

Dekkers said the comment had been a “quick response” at the industry forum to the Nexavar issue and added Bayer wants “all people to share the fruits of medical progress regardless of their origins or income”.

A short post this time… since the above subject matter speaks for itself, in more words than I could pen!

The above can be also be easily interpreted to mean {in jest, or sarcasm} that only those who can afford treatment are entitled to treatments and life… Methinks this is an excellent solution for over-population!
And do note the company’s answer – also read the full article. There isn’t even a hint of remorse, or shame on the statement as per me: you be the judge for yourself; the statement/s speak for themselves.
The clarification says the Drugs are for everyone – but a quick (spontaneous?) response by the top company man says the exact reverse. Which is nearer to the reality – a quick (spontaneous?) response, or a well-thought out and planned statement? That is a call that is best taken by each reader here. 

I am just plain shocked into stunned disbelief at this; never in my wildest dreams had I thought…

Anyways, let it be. Sometimes, silence speaks more than words!


Published January 24, 2014 by vishalvkale

The Devyani Khobragade episode is slowly receding from public memory & media attention, on the back of a gag order, behind-the-scenes diplomacy and a wish to move forward from both the involved parties. Having said that, every once in a while, a tit-bit of news or information does reach us that indicates that all is not well, and is in reality very very far from being well. The continued aggression by India on the US Embassy Visa issues and Taxation issues, as well as Salman Khurshid’s insistence on Trafficking Visas, combined with Indian insistence that USA drop all charges indicates that it will be a very long time before things normalize between us and the USA.
At this point, it is important that we do a post-mortem on the entire event, and try and determine what went wrong, or at least what the reasons this happened, as well as analyse the USA’s behavior. I have analysed the Indian response in the previous  2 articles on this matter; {Self Respect Vs Trade; Strategic Partnership} and a full analysis on what went wrong is obviously beyond the scope of my blog given that I lack full information on the event. That leaves an analysis of the USA’s responses – which is critical, all the more so since any analysis done now will be far more balanced than when the bonhomie is back between our 2 nations. Further, this has nothing to do with the guilt or innocence on the part of any party – US School, US Embassy, Tax Issues, Visa Issues or even Devyani Khobragade. 
Before we get into the specific post-mortem, let us remind ourselves of the strides that have been made in this relationship (at least till Dec 12th, 2013) – just so that the entire matter is put into perspective. India and the USA had been described as the defining partnership of the 21st Century by politicians from both sides of this debate, right till the last level. India, which had a healthy distrust of getting into defense deals with the USA, was just beginning to shed its reticence. There were indications of a wide-ranging partnership on several important areas ranging from Space, to Defense, to Energy and more. India was being touted as a possible counterpoint to China. This is the backdrop of the matter at hand. And, it is noteworthy that the USA let Russians, being investigated for far more serious crimes – including consular officials, leave the country. It is also noteworthy that the USA did not respond to several Indian approaches and letters made to the USA in reply to its September communication. Put all of the above together – and the picture that forms is not a very healthy one, or indeed one that augurs well for a continued healthy relationship. 
The total disregard for the numerous Indian approaches by the state department in the USA – and it is a fact that India had been approaching for this case from a very long time – sets a very disturbing precedent. As does the disregard for the Indian warrant – justified warrant or not, fact remains that a warrant is a warrant – and the disregard for Indian laws and judiciary as is evident from the almost surreptitious removal of the family from India. This, when taken in the light of the partnership statements in above, point to two things – first, that India does not count for much in the eyes of the USA – or, as is claimed in the Media, The Obama Administration. Keep this last point in mind – I shall attempt to connect it up in Scenario – 2. 
The fact that they chose to ignore Indian laws, Vienna conventions with specific regard to treatment of diplomats even if under arrest, Indian Judiciary and the Indo-US partnership conclusively proves that there is no importance given to this relationship. I can make an allowance for the now-known fact that there have been major differences in the positions of the 2 sides – but the manner and the attitude of the approach as well as the way this issue was handled within the USA from start to finish, suggest that there is no genuineness in the US’ statements of a partnership – let alone a strategic partnership. If you value a partnership, you ought to have at least responded to the many Indian overtures on this matter. That they chose to studiously ignore all such overtures is conclusive. 
Put all of the above together – and the word you can spell is arrogance. This seems to be sheer arrogance and nothing else – a belief that you can ride roughshod over the position of a large nation of 1.27 billion people such as India, and a mistaken confidence in your own ability to disregard international conventions, norms as well as opinion. This is clearly evident in any number of previous spats the USA has found itself in. A case in point is the spy saga, when the USA spied on even its own partners like Germany and others, without a single thought to their opinions, and their response if found. This is also proven by the US refusal – consistent refusal to apologise. 
The willingness of the USA to take on the ire of even their closest partners, and the willingness to break all established norms of international discourse as in the spy saga, point to a colossal arrogance – the arrogance of the lone superpower, the arrogance of the party that knows that there is no nation, or indeed group of nations on Planet Earth, that can take it head-on either militarily, or in trade. We need to analyse this carefully – and ask ourselves is this the right path to take? Will this arrogance become out-of-hand? Can anyone say with any degree of certainty that this arrogance will not become even more over-bearing, and reach a level that can become harmful? 
A close analysis of the past year or so will reveal that the USA has been under constant pressure, and has been on the back-foot consistently – spy saga, Edward Snowden, DK episode et al. It has been regularly placed in the unfamiliar position of defending its actions, and saving face. In some cases, it has required a significant climb-down from previous positions. The events have seriously dented the image of the USA across the world, which is now increasingly viewed as a rogue nation, or at least a serious problem. Yet, this has done precisely nothing to its approach of steamrolling everyone in its path, whatever be the issue. 
An analysis of the statements in the aftermath of the DK episode makes it even more interesting. You had John Kerry and the US Ambassador expressing regret; you have denials of bad treatment; you had clarifications regarding an ugly video that emerged. Later on, it emerged that apparently, they were as angry as we were when this episode emerged; you had the US Defense Department putting pressure for a solution; isolated voices calling this a big mistake; statements that they did not expect such a response from India of all countries. Compare and contrast this with India, which was speaking in one voice – the Government, The Opposition – everyone was united, and spoke in one voice. 
This leads us to a few questions – does the lack of the chance of a response mean you can insult a friendly nation, break its laws, and ignore all its efforts to sort this matter out before it exploded? Furthermore, what does the multiplicity of voices emanating from within the USA mean? What does the fact that the state department can proceed against an important representative of one of your most vital partners, despite misgivings within your own people, mean? How is it that the USA, with its acknowledged abilities, was not able to foretell the Indian response despite having an example in Italy, mean? How can a change of guard-  Bush to Obama, fundamentally alter the nature of an important relationship? How is such a major nation see-sawing in its approach? How is it that a change of one man or a few people, totally alter your approach?
Contrast with India, which has shown a steadiness in approach on Foreign Policy as well as internal economics, despite the many changes it has experienced! Viewed from afar, the Indian approach, one of constancy in one direction, comes across as far more mature, its shortcomings notwithstanding! But what does it state regarding the lone superpower? It does not instill confidence in its internal systems, procedures and processes, for one. Second, the presence of a multiplicity of internal voices, added to the power within one department that can bring a vital partnership almost to an end – raises a serious question for all of us, a question from which we cannot duck. Namely, just who is in control in the USA? 

Book Review : No Man’s Land

Published January 21, 2014 by vishalvkale

The startling cover, which draws your attention to it and pulls you in; the cryptic back-cover story outline all conspire to create a desire to and an interest in reading this book – especially as it comes in the midst of an almost unprecedented land rush in India alongwith its attendant scams, accusations, tragic stories, stories of greed and criminal nexus. The entire first look of the book in your hands is one of an intriguing battle for land and its attendant schemes, making for an intriguing and absorbing tale of deceit, skullduggery and passion. Nothing could be further from the truth – at least in terms of the land battle. The book is an absorbing, intriguing and passionate story – but it has nothing to do about land, and everything to do about intense human emotions, passions and faults, an unforgettable and tragic tale of errors and of human folly. 
Agastya – A man of integrity – but twisted ideals and morals in terms of personal relations; the anti-hero – and a rank idiot
Shashwat – Awesome. Simply awesome. 
Ramdev- Agastya’s father – and a man. A real man… with a blind spot – where Dushyant hides
Shailja – You be the judge. To me, an amoral and twisted personality
Pranay – A man trying to find his way in the big, bad world…
Karan – befits the name – in every sense of the word…
Shreya – Surprise Package
Shubhangi – Won my heart, and my respect. Period. 
Dushyant – Again, fits the name – Evil, The end justify the means – and never mind integrity
Chhaya – The hidden personality
This book is not about the land; the land merely forms the principal background to the sequence of events that flow through a family. This is the story of Agastya, a man of integrity, but simultaneously also  a man of twisted morals, a man who has no qualms about keeping an illicit affair gping, a man with no courage to stand up for the woman he purports to have loved – in short, the story of the life of a complicated and complete idiot. It is the story of his follies, and his undeniable talent and hard work. It is the story of his life, his successes and his failures.
The book traces the life, of Agastya from a small shop to a thriving business in a few short years, alongwith with impossible affair with Shailja – which continues after her marriage – resulting in the birth of the illegitimate Karan. It traces his fight with Dushyant, his brother-in-law, and the increasing distance between him and his immediate family. This is where the land comes in – and Agastya, one fine day, decides that if he can do it once, he can do it again. He quits his business, asks only for the land in return, and sets about building it into a thriving agricultural business. This is the story of Agastya, and his best friend Shashwat – who stays by him at all times – through thivk and thin.
This is also the story of Shubhangi, a loyal devoted wife – who quits her husband the moment he confesses to the affair with Shailja. This alienates the entire family, leaving his son Pranay in a boarding school as Shubhangi cannot recover from the shock. This is the story of predatory intent as shown by Dushyant and Chhaya; this is the story of straight-laced and honest decency as shown in Ramdev, Agastya’s father. This is the story of his 2 sons – Agastya and Pranay, who fate, and society has pitted in a remorseless vortex that threatens to dissolve into mayhem
And this is the story of the land- the last on the camel’s back in an already divided family, a land that becomes pivotal. For the second time, Agastya has built something from scratch. The first time, he walked away from what was his right – given that he and Shashwat built it up. They did it yet again – only, this time, Agastya is bed-ridden, and on his last days. This sets the scene for mayhem, as Pranay, Karan, Shailja, Shreya, Dushyant all get entangled in this mess… all brought about by one man rank idiocy… a story of the mistakes of the life of Agastya!
From start to finish, the book is an enthralling and absorbing read. It is a compelling story, tragic in some ways, heart-warming in others. The narrative is powerful, engaging and disturbing – despite this, it is a puller, as it doesn’t leave a tinge in your heart. Instead, it keeps you wondering what will happen next. This is a book  to be savoured slowly; it is not a book  to read in 2 hours and throw. It is a book to be relished, read slowly and absorbed – letting the characters grow into you
The characterisation has focussed more on the internal attributes that make up each individual in this kaleidoscope on the life of Agastya. You dont form an image of the person as such; but you get deep insights into the personality of each individual. In keeping with the story, each character has several tones, and does not fit into any stereotype. This is a grey story – and all the people are grey – Ramdev, Shubhangi and Shashwat apart, who manage to shine like diamonds in an otherwise amoral bunch of rascals. 
It is a very involved, deep and multi-layered story, focussing on individual relationships, the pulls and pressures that operate on each person, the desires and ambitions of each, and the thoughts and the reactions – which make for a highly charged, passionate, deep and intense human story. It is not a make-believe world, it comes across as a real-world situation, where each character is given several choices – and the choices actually chosen determine the story, and are dependent on the personality of each person. 
It has been very well presented, and keeps the interest alive throughout. The pace is just right for such a deep, multi-layered and intensely human story – slow but not languorous, deliberate but not boring. The reader tends to flow alongwith the story, getting involved, getting angry and frustrated at that fool Agastya, getting angry at the machinations of Dushyant. You start to identify with each character deeply, which indicated that somewhere along the line, the author has managed to make a deep and lasting connect with the reader…  

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Diplomat Affair – 2 : Self-Respect Vs Trade

Published January 17, 2014 by vishalvkale

“An internal e-mail sent by the American School to its teachers here, asking them to be economical with the truth about their visa status, is “a serious issue relating to visa and tax matters,” External Affairs Ministry spokesman Syed Akbaruddin said on Thursday. “We are examining them carefully,” he said.”
If the above is true (which I personally dont doubt),  its time for Tit-For-Tat, simple as that. They proceeded legally in a one-off visa fraud case; we should proceed legally in what seems to be a carefully planned, institutionalised visa fraud, which is a far more serious offence, and has many damaging repercussions any which way you look at it. They arrested one of us – let us pay it back in kind. Fully. Sure, let them go – we want to be friends, we want to be partners. But let them also realise that India wont be taken for granted, so beware!  And this is not a fanciful revenge notion; my objective in stating this is not the gratification of the baser sense of revenge; neither is it born out of a desire to save face – although that is admittedly part of it. This submission I am making, this request of mine to the Government Of India is based in the way of the World. If you want people to respect you, you have to be a little tough, and a little calculating. If you do not want to be treated as a doormat, then you have to stand up and fight for what is rightfully yours; even if it means a sacrifice over the short term.
The USA raised a highly questionable case against a Senior Indian Diplomat, a person representing the nation. Any which way you look at it, that case raises several deep questions. And the way this petty matter  was handled  – regardless of guilty or not – also raises further troubling questions for India. Now we have unearthed what decidedly seems to be, as The Hindu article above claims, evidence of an institutionalised fraud, running to decades, and defrauding India of what might be crores in Tax Revenue (as per firstpost). In addition, this is a standard practice adopted by the USA. Not only that, it raises extremely worrisome questions about how the USA is taking India and Indian Laws for granted. 
This is a general trend in US dealings with the world. Notice how they apparently flouted tax  and legal norms while spiriting away the maid’s family. Notice how they paid scant regard to Indian Cases against them. Notice how they walked into Pakistan with total impunity on innumerable occasions. Notice how they saved Davies. Notice their behaviour across the world. In my opinion, it is now time for the world to tell the Americans that they cant get away with it all the time and every time. Let them know that the world has changed – and, as some international observers have stated, it is only India that has the image and clout to pull it off. 
But the above is also not the reason – at least, not the core reason – for my assertion that we should firmly tell the US where it stands in the Modern World with respect to India. India is not the policeman of the world; we do not have either the wherewithal or the intent to be one. The core reason for my assertion is that a soft-spoken person will always be taken for granted, and treated as a doormat. If we have to stand up and be counted as a modern, progressive nation with the intent and the potential (if not the ability) to become a true regional power – then we have to make ourselves heard, and our intent clearly communicated across the world.
This will enable our diplomatic corps and enhance their effectivity; it will act as a force multiplier in our international engagements as well as ensure that any step contemplated by other nations vis-a-vis India will only be taken after a careful analysis of the pros and cons involved. It will send a powerful signal of a confident India, an India that is prepared to take the fight to others to make itself heard, an India that is aware of the risks involved, and is yet confident of itself to undertake tough calls against errant partners. And if handled well, this will also send a signal that the new India is an India that can be uncompromising, tough and yet considerate towards partners who want to work with it, rather than at cross-purposes. 
Further, the need of our “izzat”, which is a way of life to us cannot be ignored – not even at the price of trade relations. Much is being said about the 90-Billion-Dollar trade; but we need to draw a line beyond which we will not go. To be blunt – would you accept an offer from a super-rich man to be his companion (no pun or hidden meaning there) for 5 Million Dollars a month? Obviously not. Would you, as a highly qualified professional, agree to sweep latrines if someone paid you a package of 25 Lac Rupees per annum? No! The same rule applies to trade. Whatever the trade cost, our self-respect is not for sale; we are not sale; our nation is not for sale; our image is not for sale; our morals are not for sale. 
There is one basic rule of trade – it has to be bilateral in nature. There has to be benefit to both sides. Trade has to ensure good handling even on cultural issues in order that a long-term relation can be built. Try and purchase anything from your neighbourhood supermarket, run up huge expenses, and every time you visit – make it a point to swear at the shop,  at its environment, and make yourself disagreeable. There will come a time when the store will refuse your business. That is a simple fact of life. Unless each trade relation takes care of the other sides’ culture, views, attitudes and personality, a long term relationship is never built. Such an approach builds mistrust, and raises serious risks of personnel taking the other side for granted – leading to the genuine servicing parameters, trade exchanges as well as quality being compromised. Since the other side just cows down, it builds a tendency to ignore flaws, lessening the delivered quality.
If, on the other hand, the trade partner or customer is finicky yet decent – there is a tendency to be careful in handling him/her, while ensuring quality and speed of despatch. The net result is a very healthy relationship. This is a fact of life; and this is what needs to be driven home to the USA – that India is not for sale. We are buying things from you – but we are paying for it. You arent giving it for free – unlike to Pakistan. If you want the relationship to continue – stop taking us for granted. Dont think that you can treat us as doormats, and continue to hope for trade. 
This US School stuff is an opportunity to tell the USA that you get off at this point. Re-calibrate your treatment of India, or its good-bye to our relationship. This is not so risky; if our own house is in order, trade will come to us. We need to focus not on being doormats to the world, but to ensuring that what we offer is at par, or better than anyone else. If we manage to do that, trade will come to us, whether or not anyone likes it. The USA is living proof of that; they treat everyone like dirt- yet have healthy trade relations. We have things to offer; if USA doesnt –  someone else will. We just have to concentrate on our offerings, and our international dealings. It means stress over the short term – true. But do remember the reality that we are the top defence spender, accounting for 10% of world trade. We can afford to call the shots. When you have got it, flaunt it. The USA is cutting defence spending; their industry is under pressure, This creates an opening for us – let us use it to the hilt. The carrot-and-stick approach!
Critically, not having the same strength as the USA  is not a reason for losing our self-respect; as we have seen – that only leads to business loss in definably clear terms. Self Confidence and Self Respect are vital components of business and international diplomacy both. High time India stood up to be counted, and told the USA – this is where you get off. The ball is now in the Government Of India’s court; it is time to play hardball with USA and hold them to task. It is time to tell them to shape up vis-a-vis India, or you stand to lose. 
Come on, GOI. Stand up for India – as I am sure you will ! Kudos to the GOI, the Opposition, and the internal stakeholders for uniting as one on this! 

Indian People – We And Our Internal Flaws Or Fault Lines

Published January 16, 2014 by vishalvkale

In this article, I have attempted to analyse our fall from the heights of the past to where we are today, and identify the most critical failings of us as a people – our fault lines

There is a massive difference between a cultural union and a political union; the political concept of india is relatively young: not more than a hundred years old, perhaps a little more, going back at the most to the mid-1800s. The cultural concept of India goes back thousands of years.

As I have written earlier – “it is high time we Indians took justifiable pride in the crafting of a political identity from a cultural union. Even a crude perusal of Indian History will tell you were were perennially divided; and that we have paid a heavy price for our lack of political unity. Yes – we were one people, and have been so for 8000 years. Yes, we are the ONLY surviving and unchanged ancient civilization – all others have metamorphosed; yes, apart from the gizmos and clothes and language, an Indian from 6000 years ago will find almost the same cultural practices – true; yes, there was cultural union – and it was this cultural unity that formed that basis for Political Unity. Political Unity has the potential to take us to greatness… but taking that to mean India was one is saying too much, and means belittling the contributions of our Freedom Fighters. There was a “Bharat” in the enlightened people only; and this was present across Ancient India. True, and granted. But the people at large were not educated, or aware enough, or cared enough, to accept it. They owed allegiance to the local satrap; that was their political identity”

Therein lies the biggest reason for our fall. Our lack of unity, and our lack of conceptualisation of the external threat forms the single biggest reason for our fall.

This is a vital point – for throughout history, for India, it has been the Ghar Kaa Bhedi who has caused us grief. Even today, it is the internal threat – Pakistan (a part of India in old times) that holds the biggest impediment and threat to regional peace. This is in fact so vital, that i place it as a separate point unto itself. This has been a repeated feature that has haunted India.

Throughout History, from Jaichand to The British Raj and upto Modern Times, it has been our inability to stick together, and our internecine warfare and tussles that have lead to disaster for us. This has lead to a series of successful invasions, and a loss of power and drain of wealth. Our total inability to conceptualise ourselves are one, and our readiness to take help from supposedly well-meaning external powers continues to this day, with Pakistan, people identical to us in every way including religion, resorting to The West, and creating trouble for us. You can look at it any way, blame any party-  India or Pakistan; but you cannot escape from the truth that this internecine issue is holding India back.

This is the way it has been throughout History – each and everytime we have lost (almost) a Ghar Kaa Bhedi has been involved.

The decline of science from the 12th century onwards, as the focus of power shifted to the Arabs and then the Mughals was another significant development. Scientific treatises by Brahmins etc were in vogue till almost 1100 AD, followed by a sudden decline from that time, as this class lost patronage. The threats to the religion from abroad combined with the inadvertent ills that has crept in by that time contributed to a hardening of norms and rituals, to the detriment of examination and investigation. We got caught in roodhivaad, and went into a general somnolent phase

The oft-repeated catch phrase that education for the masses was absent in Ancient India is just a myth; records show that each village had a school or a gurukul with equal participation from all castes in the same class or batch of shishyas – which lays bare the false claims of casteism. This was prevalent till Macaulay ripped apart this system.

Given the above 2 facts, we can now put them together to conclude that loss of patronage,combined with a perceived as well as real threat to the way of life contributed to a decline in the investigative atmosphere, with the focus shifting towards protection of religion and the way of life, This is borne out by the steady decline in scientific works in Sanskrut etc after 1100 AD.

Post 1757, the unprecedented serial gangrape of India for a period of 190 years is the icing on the proverbial cake – or more appropriately, the last straw on the camel’s back. Entire ways of life were destroyed – artisans, farmers, teachers, painters, weavers, sculptors etc were rendered jobless by the Raj’s brutal policies. A series of famines made living itself a struggle, and each meal an achievement, Traditional means of livelihood were destroyed, new means were out of the reach of the masses, This systematic rape of India created an atmosphere of total helplessness. {Please read entire story of the systematised destruction of the Indian Economy here}

“And this is the story, in a nutshell, of how one of the 2 greatest trading engines in the history of Earth crashed to its nadir. By the second half of the nineteenth century, the destruction was complete; nothing remained of the once-great Indian trading and manufacturing powerhouse. The towns fared slightly better thereafter, since the Brits needed people to run their administration; that let in modern education. This restoked the engine; the existing capital rose in the form  of some manufacturing units of initially textiles in the late nineteenth and early 20th centuries as some Indians tried to restart it.”

This brings us to the final nail in the coffin – corruption. There was already a significant fault line in the Indian make-up; no one can be perfect. A people who had overcome all that was thrown their way; who had survived intact, unchanged and unchallenged for over 7500 years had to have an Achilles Heel. And that was our penchant for placing the personal above the community at the worst possible time – call it Ghar Kaa Bhedi, or call it Our Lack of Unity, Or call it our inability to see the big picture, or call it our inability to look at both external developments as well as internal realities. Call it what you will; this is a major fault line or flaw that exists in us as a people – Itihaas Gawaah Hai. This was a sporadic occurrence in Ancient India – but whenever it happened, it was extremely damaging.

And, in the atmosphere of helplessness during the Raj, this was rubbed raw, as life itself was a struggle; you had to do something to live. And, this fault line was now fully exposed, as people tried to curry favour – they had to, in order to grow, feed their family, and survive. They had no option. And, in the presence of the fault line identified, this lead to a habit of corruption that became carved into stone into Indian Psyche,Over a period of time, people became habituated to currying favour; to corruption. A small, tiny fault in the make-up in what is arguably the most successful civilization in terms of longevity, culture and spirituality was rubbed raw, and made into a defining characteristic of the Indian

A parting gift from The Raj… alongwith Macaulayism and an Inferiority Complex

And with that, we arrive in Modern India – a land struggling to find itself, to come to terms with its inarguable greatness while simultaneously struggling to come to terms with its most critical flaws; a heady but lethal combination that gives us both  the potential to arrive at the place that rightfully belongs to us – at the summit of all civilizations, while also creating a serious risk of total failure and disaster…A land that has so much to be proud of, while also having so much to be worried about; A study in contrasts; and a veritable cornuncopia of contradictions…

Retail FDI : A Complete Analysis

Published January 8, 2014 by vishalvkale

A summary of my posts on Retail FDI – presenting a complete analysis

Seeing as there is a lot of opinion floating around, let us take a look at some hard core statistics of this trade, as well as current research which proves quite conclusively that this is just a political brouhaha, and that there is no danger to the Mom-n-Pop store format in India. 

“I had occasion to visit the market today to stock up on provisions, and I decided to cross-check my personal hypothesis by talking to a Reliance Fresh Outlet and a couple of my regular Kirana Stores. These are almost next door to me, and more importantly, are less than 100 yards from an EasyDay Superstore

The Kirana Owner was pretty candid in his analysis. He said “Dhanda kam hone kaa to sawaal hi paida nahi hota sir. Peheli baat to har cheez ke daam badh rahein hain, doosri baat hum graahak ke baju mein hi baithhe hain. Pichhle teen saal mein humaaraa dhandaa to badhaa hi hai, ghataa nahi. Itnaa zaroor hai ki kisi din 5000 ka maal biktaa hai to kisi din 3000 kaa.”

Translation: Business has gone up in the past 3 years. I asked him about the past 3 years simply because it has been around 3-5 years since the modern format stores- the big chains extended their presence in Indore. I live in one of the biggest but oldest suburds in Indore City with several major colonies. There are 2 major LFR outlets within 1.5 Km of each other servicing a major residential region of the city, and these retailers were in the immediate vicinity of the superstore. A perfect example of co-existence

At Reliance Fresh, I talked to the billing counter clerk. His feedback was there were around 300 – 500 walk-ins  per day with an average billing of around 100000 – 150000 per day. The purchasing habits of customers were heavy purchases in the first week of the month followed by sporadic purchases spread through the rest of the month. I was frankly surprised at the low average billing and queried him on it. His response was a big learning for me: “Sir, It is not like that. Yes, average billing in the rest of the month is low for normal days – but on scheme days the offtake is greater. Retailers – nearby retailers – tend to stock up on various commodities (especially oils) and products in bulk whenever we launch a good scheme. The walk-in I told you about are purely retail customers”. This tends to confirm my observations on my various visits to superstores when I have observed bulk purchases happening. It was nice to have confirmation of my observations.”

First, the proof of my analysis:


  1. The higher strata of society will be tapped by the LFRs
  2. There might be an initial slack in monthly sales turnover from kirana stores in the short term, especially in the vicinity of LFRs, but over the long term this will be compensated by alterations in stocking patterns, population growth, service improvements, cost advantages of the kirana setup
  3. Organised retail – LFRs -are already in India in the form of the Indian chains. This is a normal development of the market – consolidation, experimentation with formats etc are normal features in a growing, developing market. The influx of Large Format Retail stores had already begun in the form of departmental stores and the local superstores. These were small shopkeepers who grew big by virtue of their business acumen. Hence, whether FDI comes in or not, Large Format Retail stores will continue to increase in number. It is only a question of a matter of time…
  4. Each format is facing its own competitive environment, and that includes both opportunities as well as dangers
  5. The Kirana Format is in no danger of extinction given its range of services, width of distribution
  6. Discernible shift in purchasing patterns for certain classes of products with cosmetics and related products increasingly being sought from Modern Retail, and groceries holding their own in Kirana

The Proof of the Arguments stated above:

The enclosed article clearly mentions that breakfast cereals, packaged rice, air fresheners, liquid soaps etc have a nearly 33% sales offtake out of total sales from LFRs. That is a huge share: one-third of total industry. Keep in mind that LFR contribute 1% of Food and Groceries industry sales… 

The customer profile consuming the above items will mostly fit into the affluent classes for Cereals and Air Fresheners, Upper Middle and above for Packaged Rice and Liquid Soaps. This confirms the observation no 1 and observation no 6 above. Next, the article also confirms the importance of home service, personal touch with the consumer, as outlined in observation no 5 in my earlier posts

The main problems are the ground reality of retail in India with particular reference to the Food and Grocery Segment. That is why its contribution from Modern Retail is at a dismal 1% whereas other categories are far ahead in terms of contributions. “While Food and Grocery items contributes 11% of the revenues of the industry – this forms only 1% share of the total category revenues including Organised and Unorganised Formats. By comparison, Clothes and fashion is at 23%, Footwear 48%, Durables 12%, Books 13%. Organised Retail seems to be facing major hurdles in this category because of fragmented and localised nature of demand and a host of local tastes and brands to contend with, A massive unorganised and well-serviced retail network, Intra – category competition and the wide spread of the Indian Market.” – (Article No 2)

The real problem is the nature of the Indian market. That does not mean that Organised Retail is doomed; far from it. But the growth will be slow and painful. You will have to build it up brick-by-brick. The expectations of rapid growth are frankly wildly overstated in this category. It will be a growing category; but the local realities of tastes, preferences, infrastructural constraints etc mean that the pace of growth will be muted. 

The second point is that Organised Retail needs to ask itself some serious questions in terms of growth targets, locations and towns to be targeted, store formats and size, in-store depth and range. Rather than be all things to all people, they will have to position themselves properly. Simply opening stores and targeting footfalls will not lead to achievement of the magic numbers! It is the bills generated and their content that counts. That is what needs to be done! Irrational store and growth targets and expectations will only hieghten the pain for the chains. The overall shopping experience has to be great, yes. But this will by itself not pull in customers. This is a basic need. The shopping experience will help only marginally; or it will help by not giving a customer any reason to shift. For example, lines at billing counters. Regardless of how much fun quotient you give the customer, you are going to lose clientelle if your billing lines are anything more than 2-3 customers deep. People will simply walk out and purchase from the local kirana. The industry needs to understand that it is competing for share-of-wallet; not with other Organised Retailers! The need of the hour is tempering of expections, and proper positioning of the stores… and the acceptance that LFR (Organised Retail) will co-exist with the local kirana in India!

Earlier Research on this Topic: 

Analysis of the above from my Blog: 

I have been arguing in my writings that the threat to kirana stores in India does not exist, and that the 2 can co-exist…. interested parties may refer the above researches that have been conducted in India circa 2008 & 2010. I admit that these are a bit dated, and might need to be re-validated. However, I have not observed any difference in any of the cities in which I have made queries and observations; the trend seems to be the same as before. Not one of the small retailers I have spoken to in any city has told me of a decline in business volume or profit.

The key finding of the report are encapsulated below:

1) An initial fall of 23% in terms of volume. This loss is made up in the subsequent years

2) No evidence of a decline in overall employment in the organised sector

3) Closure rate of the small kirana store @ 1.7% due to the Organised Retail Phenomenon. Total Kirana closed were @ 4.2%. Out of this 4.2%, only 1.7% were due to organised sector factors

4) Competitive response from traditional retailers through adoption of technology and improved business practices

5) Extension of credit to customers

Far more interesting is the anaylsis of the impact of / on customers

1) Increased Consumer Spending

2) Proximity is a major advantage of the small retailer

Increased Consumer Spending

This is something all of us should have observed! We do tend to pick up far more items when the full range is displayed in front of our eyes: that 10-rs pack of chocos; those cakes and tit-bits; small tinkers that we spot on shelves; the odd item with a deal too good to refuse; the latest kitchen gizmo; that shiney kitchen aid; that bunch of hankies we dont need; all those lovely toys for the kids… the list can be endless.


An Organised Outlet will be at least a km away – if not more. The very fact that the local kirana store is right next door is in itself a powerful advantage. This is particularly important since needs arise in a normal household practically everyday. Further, quite a few items are usually forgotten in our trips to the mall – or the brands we need are not available.

Both the above do not explain why is it that kirana concept is not only surviving, but also thriving. The adjustments made by this category can be said to be:

1) Convenient Timings

2) Credit Facility

3) Lower wait time in-store

4) Personalised Service

5) Smaller Pack Size Availability

6) Consumer Goodwill

7) Home Delivery

8) Facility of open goods: loose sale of packaged goods

9) Local Brands Stocking

10) Knowledge of Consumer Preferences

11) One-stop shop concept, with a wider range of products being stocked – viz. stationery, batteries, bakery items, snacks and sweet meets, ice cream, soft drinks,

12) Friendly replacement and return policies

13) Innovative new products especially in impulse categories

14) Perishables like milk – esp home delivery on coupons

15) Bill payment support to nearby households and other services

16) Stocking of all new product launches – faster than even the chains

The above small items, taken together, are creating a powerful force that is retaining the customer profile. On the customer front, what is happening is that the share-of-wallet, which was earlier 100% to the local kirana market, is now being shared between the organised retailer and the kirana merchant in a few segments of the market. For the lower segments of the population, the facility of smaller pack sizes, loose goods and credit are together ensuring stickiness. In fact, these last 3 factors are powerful strategies, given India’s demographic and income profile. As an example, I have frequently found that a 100g pack of my brook bond herbal variant of Red Label is not stocked by malls. I can think of quite a few other similar cases…

The other major factors in the equation are

1) Increased Consumer Spending

2) Increased Prices

3) Increasing Households and Population

4) Increase in Per Capita Income

These factors are growing the overall market: which is creating space for all the players!

India has 14 shops per 1000 people – 1.5 Crore retail outlets, and it would be being optimistic in the extreme to expect a handful of Organised Retailers to kill of the unorganised sector. Yes, the Organised Retail Sector is Growing rapidly – the figures are 36% y-o-y, but the main drivers of business as on date are different. In the Food and Grocery segment, the three identified differentiators are conspicuous by their absence.

  • First, this space has a widesrpead, well penetrated market, with each locality and each house being properly serviced
  • There is limited scope for value addition – tangible value addition- in this category for the consumer.
  • These are low-involvement purchases and customers do not think and evaluate purchases too much – they are habit-formation categories – and habits are the hardest to break
  • Proper servicing of this unorganised sector by the companies. One has to understandthat for the FMCG category companies, this market is the bulk volume generator. Further, since logistical challenges are limited due to small SKU sizes and low absolute prices per SKU, each store is properly stocked with even the latest products. The critical point here is that the advantage of new products / full ranges is not present for the Food and Grocery Sector. Organised Retail is competing not just with the small retailer but also the industry norm of weekly servicing of each outlet in the entire nation
  • The fundamental drivers of business in this category are thus different – quite different. So are the ground realities. This category is one of the most streamlined and organised categories, as also the most competitive among all the products categories. Easy logistics, Low SKU Price in absolute terms (how much does even a premium biscuit cost – 50 rs? Contrast it to one shoe- 750/-), established systems and habituated customers create an entirely different paradigm of business

That is not to say the Food and grocery as a category will not grow in Organised Retail – it will. It is one of the top 7 categories. However, the fact remains that today, in the Food and Grocery segment, the share of Organised Retail is only 1% as opposed to more than 10% for other categories

LFRs – Large Format Retail chains – have been around for some time now, and have completely failed to make a dent on the retail landscape. We have already seen the advent of supermarkets, and they have yet to kill off the small retailer. What is happening is that in the vicinity of these stores, local kirana business is getting impacted by a few percentage points over the short term. Over the mid- to long- term, this can be easily overcome :

  • firstly by the attendant increase in population
  • secondly by a change in stocking patterns and
  • thirdly by an increase in personalised service

Size of the Indian Market, which makes full coverage nearly impossible . India is a very distributed market, with a Kirana store every 50 yards from a residence. That coverage is going to be hard to beat, and is unmatched anywhere.

The small irritants: lack of home delivery beyond 3 kilometers / minimum billing requirement; long lines at billing counters could add up to a lot, and make your regular retailer the preferred option

The presence of a large number of small and local brands especially in the provisions space, which will largely be ignored by the LFR stores. This problem is exacerbated by the decision making heirarchy in organised retail, as well as by the lack of personal touch with the consumer. By contrast, for the local kirana stores, the decision maker is in constant touch with his market and is aware of local preferences and consumption trends, and is in a position to make quick decisions. This is simply because of one largely ignored psycho-sociological factor: the consumer will rarely, if ever, tell the large supermarket that he prefers such-and-such a brand. Whereas, this same consumer will be far more upfront with the local store with whom he has been conversing for years.

The implication could be a change in stocking patterns at the local kirana store, with a lesser preference and focus on cosmetics and a greater emphasis on provisions. Secondly, we might also see a change in depth of stocking, with small to medium size packings being available at the kirana store, and the full cosmetic range being available at the LFR. This can already be observed in the market: the 2- and 3- Re single use pouches can be seen in local stores, but not in the major stores. As another example, in my home we purchase only a select brand of atta that is not stocked by the nearby supermarket…

It would require each chain to set up something like 5 – 10 stores in just one city like Indore to properly cover the city – extrapolate this number to India, and you have a massive investment outlay… this in a crowded market, with Reliance Fresh, More, Easyday, Big Bazaar etc all already having a significant presence.  Large majority of consumers are 2-wheeled, and LFRs do not have conducive home delivery policies. This means that only people with cars can shop at these LFRs, or customers from the immediate vicinity. This significantly limits their potential area. Further, the problems in relation to provisions – demand of the local brands combined with their sourcing policies will also serve as a further deterrent. Not only that, each chain has its own in-store brands, and will thus not encourage the local brands which will be available in the local stores. The perception of supermarkets being costly will also deter a large number of consumers from tapping into these outlets

The lower financial outlays of the local kirana stores will mean significant cost-savings, which can subsequently be passed on to consumers. This is already a feature in the mid-level stores- i.e. the local supermarkets like Gokul in Raipur and Prem in Indore, wherein you can already get similar or lower prices as compared to organised retail

The other perspective is the advantages that can be had from organised retail. Please note that I state organised retail and not FDI…

  1. Concentration of buying power will lead to a reduction in middle men, and a better price realisation to farmers. It might also lead to lower consumer prices
  2. The dangers of FDI / Organised retail overpowering local guys will not hold good in a market as varied and distributed as India… see coke-pepse example below for details
  3. The benefit to the supply chain side will be tremendous, since organised retail will perforce either have to invest themselves, or bring about an atmosphere that will engender investing in cold storages, for example
  4. The benefit of economies of scale will also benefit everyone in the system


Published January 8, 2014 by vishalvkale

In many ways, as a nation, we are living in a never-never land, and dreaming of a situation that is untenable in reality. As a nation, it is high time we faced upto some uncomfortable truths about ourselves, our attitudes, our motives and that of the world around us. We can no longer continue to live in the same delusions that have characterized us and our approach any longer. In the first part of this article, I shall dwell only on some peripheral matters, subsequently taking up more complicated and central matters in the later parts of this series. This is a first article in an attempt to make myself, and as many of my countrymen as I can reach, face the realities of us as a people and as a nation. At the outset, let me be clear who I mean by “us” in this article : I am specifically referring to Indian Citizens only, not PIOs. Not only that, I am referring only to the English-educated, top few percent of the population, who are largely in a blissful never-never land.
The diplomat case that is currently the rage in Media has exposed a deep fault line within ourselves – one that we need to confront for our own sakes. As I observed in the previous article on my blog, for  the first time I was able to notice a clear cleavage between the online discourse, and the Media coverage / word on the streets. This is a most interesting phenomenon – for previously, everyone would be in tandem on issues; but not this time. And a close observation of the comments from the public on social media has given me a glimmer of an insight, which is stated below. 
First, and rather inconsequentially, is the Indian tendency to create a hype around the USA, which is driven by various factors. While I don’t profess to understand all of these factors, a few of them are self-evident – and all of these are uncomfortable. The USA remains the THE nation, and a dream to be dreamt, an ideal to be followed and a friend to be cherished. This is despite clear and present evidence – irrefutable evidence – that the USA wasn’t, isn’t and will, in all likelihood, never be a friend, as I took pains to point out in the previous article. This is also despite it being common knowledge that no one has till date befriended the USA, and benefited from it.
 High time India woke up to the reality – the difference in treatment of the Russian Diplomats (Both cases) and this case drives home a stark and naked reality: the USA does not care about India. Its continued refusal to backtrack also flies in the face of its stated intentions of taking the relationship forward, and protecting the 90-Billion-Dollar trade. Quite simply, they do not care. High time India woke up to this – or rather, high time the English-educated, top 3% intelligentsia in India faced upto this stark reality. If the USA cared, this would not have happened at all – regardless of the guilt of the diplomat. And, once it happened, it would have been sorted out by now. 
The inability of a large number of educated Indians to see the larger ramifications of this case is a pointer to 2 deep faultlines within ourselves judging by the reactions of PIOs and NRIs. The first is the penchant of ourselves and our media to treat India as the caretaker of the Aryan Civilization, of the Hindu Civilization. High time India faced upto this fact – and accepted that we are no longer the caretaker of anything or anyone. We are not a Hindu Nation; we are a secular democracy. Why should a success by a person who has visited India barely a couple of times, or indeed perhaps never, be highlighted in the media? Why should we, as a people, pay any attention to what an American or a British Citizen does or achieves, regardless of this person’s ethnicity? 
This person is not an Indian; he or she owes allegiance to their country- which, in some cases,  they have opted for, forgetting and foregoing their Indian nationality. Let us accept that reality. The bonds of culture will automatically ensure a tie, and a relationship. Let us engage with them for mutual economic benefit, given that they are of the same high-context culture, and share a common history – but draw the line there. That does not mean we as a people attach undue significance to their achievements. Let them be; they have their own nation – USA, or UK, or whatever. They have taken a pledge to be true to that nation; so be it. I wish them all the luck. I would rather focus my time and energy on achievements by Indian Citizens, regardless of whether this person is a Hindu or a Muslim or a Christian or a Sikh. High time we Indians stopped focusing on what American Citizens, British Citizens or European Citizens are doing – and devote that media space, that time and that energy to our own people – people who continue to hold an Indian Passport, wherever they reside. It is time to confront this tacit fundamentalism and cultural complex we have. 
The second deep fault line is applicable, in the true sense of the term, to all Indians – but it is most felt in the creamy layer – which I am addressing in this article. And that is the level of frustration that is being felt at the bureaucracy and at corruption in general.  A large number of Indians, in their social media comments, took pains to point out the controversies that have dogged the diplomat in this case, while completely skipping the larger picture – one that was well covered with a balanced coverage in the Media. Despite this, people just could not see beyond the case, completely ignoring all the other factors and completely valid concerns raised by the Diplomat and the GOI. This is indicative of a deep and well-founded, justified anger at the frustration being felt by the educated Indian.
This is a good and timely sign of a very positive development; it is a known fact that corruption is one of the key problems facing India. And that is why I respect the viewpoints of people who made observations basis individual facts in this case (howsoever inaccurate they may be), rather than the larger aspects of diplomacy and international relations. The reason why this particular instance is so significant is that, in this case, the national viewpoint was subjugated to the individual merits of the case – which is an indicator to the level of frustration in the people. Educated India has, at last, woken up. May this trend continue in the new year 2014 with greater emphasis and speed!