A study by Crisil, the Indian affiliate of Standard & Poor’s, has found that the lack corporate investment in modern infrastructure to connect the country’s impoverished farmers to urban consumers is leading to huge wastage of food en route to market and driving up inflation. Financial Times
Resistance by India’s politicians to the entry of large-scale food and grocery retailers could be costing the country up to the equivalent of 1.7 percentage points of lost economic growth, the study suggests.
India’s ruling coalition has been reluctant to allow large retailers to enter the market, particularly foreign chains, for fear this would put millions of small shop-owners out of business. Retailers such as Carrefour, Tesco and Wal-Mart, have failed to make progress in India because of rules barring foreign direct investment in stores selling goods under more than one brand.