There is not much place for the argument about utility of FDI in India. In fact, it helps India grow and import. This is true for all big emerging economies; the BRICS. Of course, the investors are not humanitarian activists who would care much about the effect of continuous and constant effect of interaction with the globe on Indian psychology. But they know it; nobody should have any doubt about it.
While probably no one in India would agree and very few in the West would agree that Indians are largely urban people. The 70% people still live in villages and small towns because they do not have options. They are urban because they do not have much loathe for foreign products once they have money, they are consuming, majorly they do not mind getting educated in convents if they have option, there is not much opposition to Anglicization and Westernization at individual levels. But politics can distort all economic selfishness. This urbanized psychology when combined with the fact that India is mostly a second producer country tells of the negative effect of education on Indian masses. It sounds contradictory but it is not.
The fact is that Indian establishment and private sector do not have the ability to employ all if all get educated. There is not so huge market either for India and China. The argument of growth can not just rely on more consumption but on better and costlier consumption as well. Therefore, consumption and growth while do not have limits, they do not imply that demographic dividends in the BRICS will always be positive. The argument of intelligent machines, automation and robotics along with renewable and recyclable technologies should also be considered. There will be violence and chaos all over about the past atrocities and present negligence if all Indians become educated. Even though Indians are supposed to be immune to revolutions in the past but education will remove the inertias of a majorly rural society.
There comes the anodyne and life-supporting system: the cultural imports, another reason to deny the entry of foreign majority shareholding in FDI. There is only one option for India that Indians start creating their own local products which can satisfy the ids, egos and libidos of Indians or else the imports of culture can not be stopped. Moreover, if Indians start producing themselves they will do almost everything that the Westerners do.
The fact is that India needs more and more capital to fulfill aspirations of its people. The best way to get capital and technology comes by allowing investments in India. Obviously, the world at large can not consume majority of products made in the West as cost could be prohibitive. There is always a question of nationalism and employment. Of course, if India imports from China, latter influence would increase, which is not always welcome.
To say that FDI in some field is good and bad in others may very well be a correct argument but the global politicians are not academicians. Even Dr. Manmohan Singh can not be considered as academic in nature. The fact is that the foreign governments take the totality view as Indian government would also do if Indians are investors. The argument that till 1700s India and China were the biggest exporters is only technically correct as they used to export mostly raw materials and low-technology products and not high-tech products. Also, the volume of trade was low. True that BRICS comes after the West but it comes only after the West.
The fact is that such debates should not be telecast live on television, as such simplifies the arguments of speakers. The point is neither Congress’ viewpoints nor BJP’s are fully correct. But Indian political elites should not be naïve to expect the investors not to look for earning profit. There can not be any cap on how much profit companies can earn as maximum retail price can always change even though the government can have some say. Nor the foreign retailers can capture Indian markets so much so as to dictate terms to Indian Parliament.
The argument that Wall-Mart and its likes would attack the Indian sovereignty is completely farce and almost xenophobic. They do not have any such power. They would come here to do business and comparing them with East India Company is totally rubbish. Anyway fallibility is on political and bureaucratic elites’ hands. Integration and connectivity are the inevitability of the time and are helpful to Indians, generally speaking. Indian sovereignty can be surrendered only by Indian Parliament that too with its conscious choice. Political elites would never surrender it anyway anytime.
The difference between the Congress’ and the BJP’s views is that between the treasury benches and opposition seats. Majorly, Indians should take it positively and move along even though it may become one of the poll agendas. What the Indian political elites should consider is the proper legislation and good regulation. If Indian political elites themselves consider only their powers and powers of their immediate subordinates and do not surrender them then no company can have that much leverage. The way Singh government is performing it appears that it would complete its full second term.