Fact-Checking the F.D.I. Debates

Wilson Ring/Associated Press

Thursday was the third day of debate in Parliament over whether international chains like Walmart should be allowed to operate in India.   While sometimes heated, and sometimes monotonous, the debates have been notable for the fact that lawmakers are debating at all, and also for how much some of them seem to know about the subject.

But how reliable is their information? India Ink examined a few of the stronger statements.

Foreign Companies Don't Buy Indian Produce

Sushma Swaraj, opposition leader in the Lok Sabha: “McDonald's does not buy potatoes from India because they say they are of small size. PepsiCo does not buy Punjab tomatoes and potatoes on qualit y grounds. They use imported material.”

Verdict: Mostly false, according to the companies.

McDonald's India: “We do not import any potatoes. Local farmers are currently able to supply about 90 percent of our total needs â€" for vegetarian products, hash browns and most of our French fries. So we still have to import some finished French fries in order to close the gap between current supply capability and demand. Our aim is 100 percent local supply.”

PepsiCo India: The company “sources all its potato requirements from within the country. We are the largest procurer of potato in India.”

Despite Its Long Presence in China, Walmart's Market Share There Is Small

Ashwani Kumar, Minister of Law: “Walmart went to China 20 years ago, it amounts to 5 percent of the market in China.”

Verdict: Not far from the truth, according to a McKinsey report on hypermarkets in China published in May. It says:

“Right now, C hina's RT Mart is the largest hypermarket chain in China, with a market share of 10.8%; France's Carrefour is second (8.9%) and Wal-Mart third (6.3%) Looking ahead to 2020, it's not obvious who is going to lead the pack. Foreign multinationals in China are thoroughly localized; domestic players are thoroughly globalized. And many players are experimenting with new formats, both on- and off-line.”

China Has Benefited From Walmart, Because Walmart Buys From China 

Arun Jaitley, opposition leader in the Rajya Sabha: “At least 95 percent of what Walmart sells in China is manufactured in China.”

Verdict: True, according to the Walmart China Web site:

“Walmart China firmly believes in local sourcing. We have established partnerships with nearly 20,000 suppliers in China. Over 95 percent of the merchandise in our stores in China is sourced locally. In addition, Wa lmart is committed to local talent development and diversity, especially the cultivation and full utilization of female staff and executives. 99.9 percent of Walmart China associates are Chinese nationals. All our stores in China are managed by local Chinese.”

Foreign Direct Investment in Retail Will Result in More Demand for Farmers

Kapil Sibal, Minister of Communications and Information Technology: “PepsiCo  started procuring potatoes from farmers in 2010. They started off with buying 22,000 metric tons in 2010. In 2012, in just two years, they have started buying 60,000 metric tons. Who is benefiting from this if not the farmers?”

Sibal also said that PepsiCo dealt with 1,800 farmers in 2008, versus 10,000 farmers in 2012.

Verdict: Well, his numbers are off, but the sentiment is correct, according to PepsiCo India, which said in a statement it “procured 240,000 metric tons of potato from Indian farmers in 2012,” more t han double what the company procured five years ago.

“PepsiCo India has established a model of partnership with farmers and now works with over 24,000 happy farmers across nine states. Some of the key states include West Bengal, Punjab, Gujarat, U.P., Maharashtra, Karnataka and Bihar. We have also set up a state-of-the-art potato seed facility in Punjab and all the seed that we provide to farmers across the country is grown by Punjab and Haryana farmers.”

(The quotes have been lightly edited.)