Is legalising commercial lobbying in India good for Western retailers?

The retired judge looking into claims Walmart bribed Indian officials to be allowed to invest in the country is reported to have decided there is no evidence for the allegation. He has also reportedly recommended that India change the law on corporate lobbying: it’s illegal in India, but part of the American way of life.

It looks as if the allegations emerged after someone saw Walmart had filed a disclosure report revealing it had spent $25 mn on activities connected to moving into India. To many Indians, the report was shocking, and sounded like enormous bribes were being offered Indian politicians and officials. To most Americans, the report summoned up pictures of overcharging lobbyists invoicing absurd sums for downloading Indian laws on foreign investment from an Indian government website. And it might sound like a good idea if Western businesses moving into India had the right to get ripped off by lobbyists if they wanted to.

Is it?

A huge proportion of Indians oppose Western retailers being allowed to set up in India. The belief is that all these foreigners will put small Indian traders out of business – an understandable point of view, given that those foreign retailers have done precisely that at home. The argument for letting them in is that Indians get wider choice and lower prices – but that doesn’t alter the fact that India has more people than jobs, and the fear that lots of well-loved local retailers won’t have a job is a real one.

Changing the law to make it easier for professional PR companies to lobby governments and civil servants is probably just the kind of change those same people are pretty iffy about too. Though it’s harmless in reality, it’s just the kind of legal change that makes people think rich foreigners are coming to undermine their way of life. Some modernising Indians might welcome the change, arguing that it forces corporate influence in Indian policymaking out into the open, and ultimately reduces bribery.

But that’s not Western retailers’ problem. Walmart’s reputation in India – and other Western retailers’ – will suffer if they get tainted by association with this well-meaning, but potentially damaging, change. They should all leave the issue well alone