in what can only be called a cowboy operation, less than a month ago billionaire Mukesh Ambani’s Reliance Industries Ltd. had taken over the operations of Future Retail and offered jobs to its employees after the Kishore Biyani-led group failed to make lease payments to landlords. Reliance Retail, the retail arm of the group had in August 2020 agreed to take over the retail and logistics business of the Future Group for ₹24,713 crores but the deal couldn’t be closed as Future’s warring partner Amazon went to courts citing violation of some contracts. Future denies any wrongdoing. Burt possessions being nine-tenths of the law, Reliance has effectively outsmarted Amazon and tongue in cheek, named the stores “ Smart Bazars”. Smart indeed. Possession, after all, is nine-tenths of the law.
Meanwhile, at the time, the Supreme Court was( and still is) hearing the submissions of Amazon, seeking an interim order to ensure that the Future Retail Limited (FRL) assets, including “Big Bazaar shops”, not be alienated till the dispute over its merger with Reliance Retail is decided by an arbitral tribunal. The bench had taken note of the submissions of both sides, Amazon and Future Group, that they have no objection to the resumption of the arbitral proceedings and said as far as “the first issue about going ahead with the arbitration is concerned, both of you have agreed”. But clearly, all that is a farce now. Amazon isn’t letting India’s largest private company breathe easy though. It has been taking out newspaper advertisements accusing Mukesh Ambani-owned Reliance Industries (RIL) of playing a “fraud” in the $3.5 billion (24,713 crore rupees) deal it announced with India’s Future Group in October 2020.
In summary, the deal involved the Future Group selling its assets to RIL. Amazon India objected to this and took every possible legal route to stop the deal. But then the hijack happened. It was indeed a battle between two giants, one global and one homegrown. For both Reliance and Amazon, their respective deals with Future are key to the dominance of India’s $900 billion retail industry and so it was a great ringside view of a classic capitalist battle of dog-eat-dog. Reliance Retail is already India’s largest retailer. It has over 1,000 offline stores. The Future deal, however, will put it beyond any rival’s reach. Conversely, with its offline 1,500 outlets, it could have been Amazon in that enviable position if it had managed to get the Big Bazar stores. The Future group is now practically extinct but then going extinct is a feature of capitalism. But the manner in which an Indian pioneer of modern retail got literally hijacked store by store because of the wrong choices it made could be a case study.
In the past three decades, India has largely internalised the idea that to aspire to be an attractive investment destination is to fully reimagine India into an income-generating asset. This involves discarding the traditional narrative of a welfare state and reinventing it as a business-friendly destination for capital investment. Over time, the country’s identity is being slowly shaped into that of a global brand and its people are groomed to be revenue-generating machines that can be deployed to generate more capitalist growth. The States within the country are encouraged to compete among themselves with catchy slogans —from Sunrise Andhra Pradesh to Bengal Means Business which vie with each other to draw capital investments. Thus, the arena of the economy looks more like a racecourse where market-ready nations dressed up as horses run to win the maximum investments possible and win the race.
Such an approach also consciously redraws political power dynamics such that any comment on the nation’s domestic affairs remains a no-go territory for external actors. No critique or observation is acceptable; even internal dissent is frowned upon. The bargain is this: the state controls the territory and puts it at the disposal of investors, and in turn, the investors legitimise the sovereign power of the state.
Most people till only a few decades ago believed that although social and economic inequalities were an unfair and stark reality, the policies of the government however poorly implemented were intended to reverse this in time. Today the manner in which the spoils of political power have come to be distributed means that this is no longer the case. As a consequence, the millennial and post-millennial generations of India know nothing and have seen nothing except the doctrine of neoliberalism—the ideology that supports the extension of competitive markets into all areas of life, including the economy, politics, and society.
Around the world, the reality is that neoliberalism does not bring an expansion of high productivity and therefore high-wage jobs. The trickle-down theory which posits that growth at the top will trickle down to the bottom. Real-life experience has shown this to be misleading. The IMF’s own studies and that of leading economists have shown that it is completely baseless. The IMF studies showed benefits don’t trickle down and hence the need to raise the income levels of the people at the bottom.
But as services become more important, apart from a small layer of services at the top, most service jobs are low-productivity, low-wage jobs. In India, we still have 65 percent of the population living in the countryside. Foreign Direct Investment and pandering to the expansionist desires of a few select business houses are touted as the panacea to all economic ills even though they only serve to expand the low-end service economy. The health of any economy, especially of continent-sized economies like India’s, has to be judged by internal resources -high savings rates, high domestic investment, infrastructure, etc. foreign investment is not a magic wand. In fact, India receives less foreign investment than Thailand and Malaysia, leave alone China.
The Congress began to shift to the right in the 1980s, both economically and politically although historically it had always come to power on a centrist program. As it shifted to the right, it lost its bearings and became schizophrenic. The ruling BJP with a philosophy that has since its inception favoured an unbridled free-market economy was more ideologically homogenous to seize the opportunity and let market forces roam free with only the semblance of regulation. The Future Amazon Reliance Saga is only one season in a drama of many seasons.
Dr Shantanu Dutta , a former Air Force doctor is now serving in the NGO sector for the last few decades.