Manmohan got Sonia letter on Jan 11

Prime Minister Manmohan Singh got Congress President Sonia Gandhi's letter voicing anxieties about Foreign Direct Investment (FDI) in retail on January 11.

If he was confused by this, he did not show it and forwarded the letter, as standard operating procedure, to the minister concerned, Commerce Minister Kamal Nath in this case. Nath met the Congress president twice after this, and let it be known that he had convinced her that her fears were unfounded.

He made two points: There were 15 million 'kirana' stores in India and if Wal-Mart decided to sell to them, it would be tapping into a big market. In other words, that small shops could thrive alongside big stores. He also said that though Wal-Mart did not technically need a partner, it would transfer technology to its Indian partner. All that the relationship represented was an infrastructural tie-up.

Based on this, a reply was sent by the Department of Industrial Policy and Promotion to the Prime Minister's Office "" that the Bharti-Wal-Mart deal was in compliance with the existing FDI policy.

Then why did Gandhi's letter, making public her reservations about the "possible impact of transnational super markets on livelihood of those engaged in small-scale operations..." leak two days ago? Who leaked it, and who gained by it? This is the question several ministers are privately asking themselves.

"Why should Mrs Gandhi have written a letter to the PM in the first place? They meet every week. If she had some concerns, she would have needed only to have mentioned them to the PM and he would have taken corrective action. This is no way to communicate," said a minister.

The unwelcome thought, in both party and government, refuses to go away: that corporate warfare might have broken out over retail and manipulated the party to cause the current controversy.

"Several Indian big business houses are telling us: why should you let foreigners come here. We can employ them and run supermarkets as efficient as theirs. Why allow them?" said a minister. "This (the leak of the letter) announces the return of the Bombay Club. It is not as innocent as it looks."

The government is now getting ready to enforce strictly, rules governing 51 per cent FDI in single brand retail. This, ministers say, may ease a little once the Assembly elections are over. But, if the Congress loses this round of Assembly elections, the chances are accusing fingers will be pointed at the PM amid a cacophony of "we told you so". "The immediate casualty will be liberalisation of retail," a minister said.