The political economy of retail liberalization: The case of India

This paper examines the political complexities of retail liberalization in a developing country such as India in the overall context of liberalization of trade in services. Drawing on the experiences of other developing countries and India's experiences in the past decade of allowing FDI in retail, the paper found that retail modernization is a part of economic development and it will continue to happen. The governments of developing countries have to take into account multiple perceptions related to retail liberalization and design a policy that is non-discriminatory and transparent. Appropriate policies should be in place to support the traditional retailers to face competition. Developing countries should be willing to bind their unilateral liberalization in trade agreements and this will enhance their bargaining power.