Mayor of London Boris Johnson recently said that companies in the UK should have greater access to “India’s booming markets.” For this to happen, India needs to loosen its small business protective laws. This would facilitate the process for British businesspeople seeking to makes sales to the up-and-coming Indian middle class and would also lead to poverty alleviation through the provision of cheaper goods.
Right now, there is a situation whereby many large UK corporations (such as John Lewis and Tesco) cannot work with the market in India because of laws preventing retailers from selling more than one branded product. Even though exclusive boutique labels such as Gucci and Ralph Lauren will be able to open up shop in India since they sell their own label exclusively, larger foreign markets and stores will not be able to follow suit as they are more inclined to sell more than one branded goods.
Ultimately, the law was established to protect India’s large amount of small businesspeople, trading at market stalls at each and every corner. Johnson also pointed out that British businesses would be able to save the Indian consumer money through larger-scale sales. India, he believes, has many more opportunities to “experiment with more openness.” If an insurance company in the UK can lower their household and medical insurance premiums for an Indian with a modest income, they will be able to put a significantly greater amount of money in other areas, boosting those industries. In other words, once multiple brand retailers give people greater access to cheaper basics (like food, household goods etc.), there is more chance of there being an escalation of wealth for some of the country’s poorest populace.
It is for this reason that Johnson visited India – to “make the case for openness and partnership.” He believes he made great progress in this realm.
