India's bitter colonial past generates suspicion

India's bitter colonial past hangs heavily over the government's renewed drive to open the inward-looking economy to foreign investment, even 65 years after independence, analysts say. Despite a dramatic economic transformation in the past two decades, the emerging market giant's 200 years under British domination still evoke painful memories. "The evils of British colonisation are etched in our minds and Indians fear foreign companies have the power and strategies to recolonise India," said Mridula Mukherjee, a history professor at New Delhi's Jawaharlal Nehru University (JNU). Those worries came to the fore last week as lawmakers debated a government move to let in foreign supermarkets -- a key plank of its economic reform agenda and aimed at drawing in more investment from overseas. Opponents fear that allowing the entry of retail giants such as US-based Walmart will force India's millions of small shopkeepers out of business. The Congress party-led government of Prime Minister Manmohan Singh won the vote to permit the entry of big retailers even as opposition parties accused it of wishing to revive the rule of foreign traders. "Vote against the entry of foreign retail giants -- think of your duty to your country," Sharad Yadav, head of the socialist Janata Dal (United) party, implored lawmakers in parliament's decision-making lower house. "America and other countries will never want India to develop -- it only loves the market here. Don't let another East India Company enter the country," he said. Yadav was referring to Britain's former East India Company, dubbed the world's first multinational, which held sway over vast parts of India and set up trading posts to ship cargoes of textiles, indigo, sugar and spices. The East India Company was disbanded after the bloody 1857 uprising known in India as the country's First War of Independence. The revolt which was savagely repressed made way for the British Raj -- direct rule by the British government. The anti-foreign tone was the same in the elected upper house of parliament. "The East India Company entered through Kolkata (formerly Calcutta) and ruled," said Naresh Agarwal of the regional socialist Samajwadi Party. "This time, they are coming through New Delhi." The feisty chief minister of West Bengal, Mamata Banerjee, has been among the most strident opponents of allowing foreign traders access to India's vast consumer market, calling it a "historical economic blunder". Banerjee's office is in Kolkata's sprawling red-brick secretariat built by the East India Company more than 200 years ago for trading in opium, cloth, tea and indigo. "Indians trusted the British and we know what happened. We were slaves," she said. "Again, we are inviting the British and other countries to rule us." Akshaya Deb, a historian at the University of Calcutta, said that "British brutality in India cannot be forgotten. They came in as traders and ended up ruling India." Defending the policy of economic liberalisation, the left-leaning government said the country cannot be subservient to what it called the "East India Company complex". "We talk about East India Company but we forget Indian firms like Tata are buying out international companies and are going global," Heavy Industries and Public Enterprises Minister Praful Patel told parliament. "Let's not get emotional," Patel said. "There is no way the East India Company story will be repeated here. Foreign companies need new markets -- even we need them." The market-opening push comes as India faces a sharply slowing economy, a gaping fiscal deficit and high inflation, which has stoked pressure on an administration already under fire for corruption. JNU's Mukherjee said Indians need to overcome their political and economic insecurity. "Why are we getting nervous about foreign giants entering the markets? India is not mortgaging its future and history will not repeat itself," she said.