India's war of the vegetables

"A riot will happen. In Jharkand, it was only one shop. In Mumbai, we could destroy 100 shops."

Ever since mid-May, when an angry crowd of vegetable vendors tore apart a newly-opened Reliance Fresh supermarket in India's Jharkand state, young men like Shamrao Patil at the Vashi vegetable market in Mumbai have been waiting for Reliance Industries to bring its retail revolution to town.

The rumour among the traders is that Reliance will be there within weeks.

"Everybody here's talking about Jharkand," says Sanas, a tomato wholesaler, "and, yes, when Reliance opens in Mumbai we will do the same."

In November Reliance Industries, India's largest private company, began the most rapid roll-out of a supermarket chain in history. In three to four years, Mukesh Ambani, the billionaire behind the chain, plans to have 4,000 to 5,000 shops - twice the number of Tesco's UK supermarkets. Together they will cover 10 million square feet - an area that Reliance says has historically taken 30 to 40 years to achieve in the US or Europe.

The prize? A slice of an Indian food retail market estimated at $200bn (£100bn), which is today entirely in the hands of independent traders like those at Vashi, where all the vegetables needed to feed Mumbai's 18 million population are collected and distributed. Reliance aims to replace India's traditional food-supply chain - its network of growers, wholesalers and farmers' markets - with its own, rationalised system. When the roll-out is complete, the group expects to employ 500,000 people.

Mumbai's vegetable trade union has close to 150,000 members and they know Reliance's arrival spells trouble.

Bhupendra Bhosle, a union member, says: "If Ambani starts collecting vegetables directly from the farmers, the middle men are going to face a lot of unemployment problems."

Starting at 2.30am every day, more than a thousand garishly painted Tata trucks roll up next to Vashi's vast concrete hangar, loaded with chillies and green peas from Chennai, and sacks full of onions, aubergines and green peppers, or crates of tomatoes, from Mumbai's Maharashtra state. They are met by more than 5,000 loaders, who bring the goods to the 1,000 independent wholesalers inside.

Few will willingly reveal their cut. Rather than risk competitors overhearing their quotes, buyers join hands and negotiate in code using their fingers.

But there's certainly much for Reliance to play for. One trader, Dinakar Patil, says he buys 40 to 50 sacks of green chillies, between 2.30am and 4am every day, from an agent at Vashi who in turn imports from Chennai. He pays around 90 rupees for 10kg, which he then sells on for 120-130 rupees a kilo to smaller wholesalers at the Byculla and Dadar markets in central Mumbai.

The speed of the supermarket roll-out is causing growing tension. One week after the violence in Jharkand, a Reliance store was vandalised in Indore in Madhya Pradesh, and the chain has been forced to delay opening in Bhopal in the face of mounting protests.

Politicians are jumping on the bandwagon. Prakash Karat, general secretary of the Communist Party of India (Marxist), a critical block in the ruling United Progressive Alliance, has called for a licence system with strict quotas to limit the spread of local supermarket chains, and an outright ban on the involvement of Wal-Mart, Tesco, Carrefour et al.

Dharmendra Kumar, campaign organiser for No FDI in Retail, a group opposed to international companies in the Indian sector, says: "There's a lot of heat going on, particularly against Reliance Fresh, and the protests are going to become more and more intense in the coming days."

On 9 August, he plans to launch a national campaign called Corporations Quit Retail, which he hopes will bring hundreds of thousands on to the streets across India. But the test will be when Wal-Mart arrives in the early months of next year, opening the first hypermarket of a chain that it hopes will cover 10 million sq feet by 2015. "Wal-Mart is very much a target, says Mr Kumar. "People see it as enemy number one. They have a huge capacity to source goods from outside, which will not only hurt the small retailer but small manufacturers."

Wal-Mart is not necessarily destined to lose. Even at Vashi, not everyone sees the need to protest. Some doubt whether big corporations are as unbeatable as campaigners such as Mr Kumar imagine. Others see exactly which way the tide is turning, and know that Mr Ambani, with his billions, will not be easily deterred by a few broken windows.