The Hindu Business Line : Bharti, Wal-Mart deal beneficial, says US official

"I think the case for the deal as being economically strong. I think it is good for Indian producers and consumers," says Mr Karan K. Bhatia, Deputy US Trade Representative, when asked about the deal between Bharti group and US retailer Wal-Mart.

Without going into the specifics of the deal, he told Business Line during a visit to Chennai that the benefits to India, or for that matter any other country, through the entry of retailers like Wal-Mart were enormous.

Boon to farm producers

In the US, having large retailers was a boon to agricultural producers, who were able to access both national and international markets. Consumers too benefited as competition in the retail sector had done a lot for the American lower and middle class, by keeping costs low.

American consumers were able to buy a whole range of goods at lower prices because retailers were able to access global markets. "They have been able to build on economies of scale and scope to be able to offer the best prices to American consumers," he said.

Besides, these companies also brought in innovation in management and logistics, which too would have multiple knock-on effects on the economy. Referring to concerns expressed about the future of small retailers - the "mom and pop" shops - Mr Bhatia said they too would stand to benefit as much as anybody else by having access to the cash and carry business that the Bharti-Wal-Mart venture would start. "I think there is tremendous upside for India in this and I hope that those benefits will be carefully considered," he said.

Fear of the unknown

On the objections to Wal-Mart's entry into the country, the Deputy Trade Representative said there was always a fear of the unknown. Often that fear got translated into support once the benefits were seen. For this, he cited the example of the open skies agreement in aviation between the US and India. Fears were expressed over the fate of Indian, whether those travelling to the US would have fewer options or whether fares would rise. In reality, customers had benefited with more options and lower fares, he said.

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