Reliance unnerved by farmers’ calls for boycott

Farmers’ protest begins to hurt businesses seen close to Modi

Business

December 15, 2020

/ By / New Delhi

Reliance unnerved by farmers’ calls for boycott

When the calls for a boycott were made by leaders of protesting farmers last week, the impact that they would have on the country’s largest telecom company was unclear

Reliance Jio’s complaint to telecom regulator signals that boycott calls by protesting farmers is beginning to hurt businesses seen too close to the government and likely to benefit from farm laws.

It was less than a week ago that protesting farmers launched a boycott of Reliance Jio and began throwing their Jio SIM cards away as a sign of protest against one of the companies that they believe are likely to gain at their cost due to the recently enacted farm laws. There were reports of hundreds of farmers throwing, crushing or burning their Jio sim cards in Punjab and Haryana, though the scale remains unknown.

When the calls for a boycott were made by leaders of protesting farmers last week, the impact that they would have on the country’s largest telecom company was unclear. After all, Reliance Jio boasts of over 404 million mobile telecom subscribers and leads the market by nearly 80 million over second-placed Airtel.

However, within a week Jio has reacted, showing that the boycott calls have already begun to pinch the market leader. Jio has approached the telecom regulator, Trai, alleging that its rivals Airtel and Vodafone Idea India are taking away its users under the guise of farmer support. In its letter, Jio accuses the two principal rivals of “running an unethical and anti-competitive mobile portability campaign to capitalise” on the ongoing farmer protest.

“Airtel and VI are pursuing a “vicious” and “divisive” campaign through its employees, agents and retailers. In order to read meagre gains in port-in numbers these service providers are intentionally defaming Reliance Jio by depicting it as against the farmers and projecting themselves as farmer-friendly while at the same time intentionally fanning the anti-government protests,” Jio said in the letter, adding that the actions by the rivals were in violation of principles of tariff advertisement and Trai orders.

Not surprisingly, both Airtel and Vodafone have junked the accusations as unfounded and baseless. While Airtel’s chief regulatory officer Rahul Vatts, in response to Jio told Trai, “Airtel has operated in the telecom industry for 25 years. During this period, we have competed hard in the marketplace and strived to serve our customers with excellence. At the same time, we take great pride in treating our competitors and partners with respect.”

It also accused Jio of being capable of “going to any length to make baseless allegations or adopt bullying tactics, we have always conducted our business with character and transparency’’. Pointing out that it believes in doing business with ethics, Vodafone Idea too called the allegations ‘baseless’. “We strongly refute such irresponsible comments on us,’’ it told Trai.

Other businesses likely to be hit soon

Telecom was just one of the businesses targetted by the farmers, who have in their sights all business establishments of Reliance as well as Adani group, the two groups believed to emerge as biggest winners from the changed rules of the game brought about by the three farm laws that open the doors of India’s farming industry to large corporates.

The farmers fear that the new farm laws are that it opens up the sector without any checks and balances for large companies, making market distortion and market domination a distinct possibility. Hitherto, even though private buyers and companies were allowed to purchase from the farmers, there were strict limits imposed on the buyers in order to prevent market domination by anyone or a cartel of buyers.

“The new law removes all controls and limits on the participation of companies, notably the large ones, who can squeeze other players from the market and then impose their conditions on us, who would have no one else to turn to for selling their produce. Farmers say that instead of dealing with many small buyers, between whom they could arbitrage, now they would be face to face with behemoths like Adani, Ambani or Walmart whose purchasing power can easily push every other competitor out of the market. That is a nightmare scenario for most farmers,” says Sunilam, member of the All India Kisan Sangharsha Coordination Committee (AIKSSC).

“These corporates have already taken over the seeds, fertiliser and pesticide business and now they want to take over the lands of the farmers. They are privatising and globalising farming sector in India and want to hand over the whole farming sector to the private sector so that is our fight which is on two accounts. One is with the large corporates, domestic or multinational, and the second fight is with the Modi government,” says Sunilam.

With the protest likely to continue for a while in the absence of any concrete steps by the union government to achieve a breakthrough and the farmers likely to intensify their boycott of businesses that are part of Adani and Ambani groups, a much larger impact could be felt in the days to come by these and other business houses that may seem to be benefitting from the farm laws.

Then, maybe, the government could feel obliged to act and find a solution to a protest that is already making global headlines and has begun to cause large-scale losses to the Indian economy. An estimate by Assocham, an industry association, the disruption caused in transport and value chain due to the farmers’ protest is leading to losses of over INR 35 billion every day and as the farmers have been protesting at Delhi’s borders for 18 days now, the cumulative losses could well exceed INR 650 billion so far.

The pressure is bound to mount on the government and especially if big businesses become targets of the protestors and their sympathisers. That picture, too, could emerge within a week.

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