Whatever in India can be monopolized will be monopolized. It does not matter where the money comes from. Indian businessmen and rich enough to take any sector under their wings as long as there is profit in doing so. In fact chances are that once a sector becomes profitable one or two business families will monopolize it. A few examples: There used to be many bus operators in Punjab. It was seen as a profitable small scale business. Today the business is monopolized by a few families. There is no FDI in that sector. Same is the case with sand mining and liquor distribution. There used to be many players in these sectors. Today they are all monopolized. There is no FDI in these sectors. None of these sectors are pro small players.
And you don’t have to be a rich businessman to monopolize a profitable business sector in India. Even if you start as a poor person it is enough to be corrupt and have dubious links with politicians. A Ponti Chadda is enough to amass unimaginable money through monopolizing a sector. How could FDI have hurt any of those sectors?
Today retail in India is unorganized and is a source of livelihood for millions of citizens. Reliance, Tata Pantaloons etc. are trying to understand this business and will win in some time. It is already happening in bigger cities. The day they develop a fool proof business model they will crush small shop vendors. No question about that. And they will monopolize retail sector at least in separate regions.
So in this situation how does FDI hurt anyone? The foreign companies usually have better employee policies than Indian companies and they are more compliant in filing their taxes. There is nothing for India to lose there.
I am not at all saying that small shop owners should just perish. In fact I feel for them same as I feel for farmers. I am simply saying that FDI or no FDI, retail sector as we know it today is doomed. It is only a matter of time before this sector will be ruled by a few business houses. FDI can only help prevent monopolization of this sector by one of Indian business houses. And we will have one less person to overwhelm our political class with mindless bribes and corruption.