Via The Financial Times, a look at India’s pending retail (r)evolution:

Parts of India took to the streets (or at least shut their shops) on Thursday to protest the reforms the Indian government introduced last Friday, chief among them the opening up of multi-brand retail to 51 per cent investment by foreign companies – Tesco, Walmart et al.

Opponents say that the reform will decimate India’s millions of mom-and-pop shops, it’s messy markets and teeming bazaars. But a quick common sense check shows that that’s fairly unlikely.

Proponents of the reform say that it will create jobs in India’s impoverished rural interiors, supply farmers with new clients, and improve the country’s decrepit infrastructure.

Opposition leaders and until-recently-coalition members remain unconvinced. So they called for a Bharat bandh, or nationwide strike.

So how at risk are the local markets? Let’s have a look at a few numbers…

To begin with, there is the matter of demographics – 800m Indians live on less than $2 a day and two-thirds of the country live in rural areas. Around 900m are undernourished. Seeing as the retail rule stipulates that Walmart et al can only build in cities with populations of 1m or more – of which there are around 50 – odds are rural Indians, most of whom subsist on subsidised food (most of which is filched by government middlemen and politicians), will never go anywhere near a Tesco. The 800m extremely poor likely won’t be able to afford to shop there.

Which leaves urbanites, in whose cities – if the state governments allow it – foreign retail giants will set up shop. As beyondbrics has reported, just 32.4m Indians paid around $30bn in income tax in the fiscal year ended in March. Of that, $3bn comes from 29m people making less than $10,000 per year – 90 per cent comes from 3.5m, and 63 per cent comes from just 400,000 people.

Let’s presume, with a fair amount of evidence to back it up, that there’s a lot of tax evasion in India, and let’s take that 3.5m people making more than $10,000 a year and multiply it by five, or ten – 17.5m-35m people as potential customers.

Beyondbrics knows a few of those middle and upper-middle class folks, and the ones in charge of the shopping tend to be, for lack of a better word, aunties. Beyondbrics rang up a few, and for them, at least, the idea of going to a Tesco Express or a mini-Walmart – the companies are likely to adapt their models to Indian shopping habits, which involve little travel and smaller spaces – was ludicrous.

“In the market… we know the people and they know us from years back, if the [vegetables] are not fresh, they tell us,” said one woman. “Today I went for green peas and coriander leaves, and my seller said this is not good for you, this is not fresh – please don’t take it – these people [at a foreign grocer] are not going to tell me, whatever is there you have to take it.”

Even if the price were the same, she continued, “the relationship with the people will not be there in the [foreign shop]. Most of the housewives like me will think like that – when you are already getting the good quality from the market, why then go to the [foreign shop]?”

But the foreign giants clearly see great promise India, and another auntie offered a hint: “I would never go,” she said. “But the young people may want to go to the Walmart.”