In his tiny, dimly-lit grocery shop in Pune, India, Babulal Borana, 50, stands behind a counter topped with grimy plastic bottles of sweets, surrounded by loose sacks of rice, lentils, and spices.

He lights a sweet-smelling incense stick in front of a figure of Laxmi, the Indian goddess of wealth, and prays feverishly for the survival of his business.

Housed in a decrepit building, Borana's shop has been doing brisk business for over 20 years. But eight months ago, a dizzyingly-lit, air-conditioned supermarket -- run by Reliance, an Indian business giant -- was erected just a few yards from his shop.

Gargantuan in size, it has been weaning away Borana's customers, shrinking his earnings by half. Borana, who never went to school, says his business will perish if supermarkets and malls continue to spring up. "This shop is all I know, all I have," he rues. "I cannot compete with them."

Western-style superstores

The Western-style stores feature long, boulevard aisles, refrigerated cases, uniformed and meticulous workers, and offer a large variety of products -- from fresh produce to other consumer durables -- all neatly packaged, accurately weighed, and attractively priced.

India's small kirana shops, on the other hand, are chronically wasteful, with prices up to 20 percent higher than in big stores. They buy in small quantities, lack storage facilities to keep produce overnight, and have almost no expertise in inventory control.

In late 2006, Reliance Retail -- run by billionaire tycoon Mukesh Ambani -- opened 300 stores in 30 cities across India with an investment of $US six billion. Whereas in August this year, US giant Wal-Mart launched a partnership with India's Bharti Enterprises to build a chain of hundreds of supermarkets likely to start operations next year. Other big multinational retailers, including UK-based Tesco and France-based Carrefour have also evinced interest in India's retail market.

Uproar among shopkeepers

But the advent of Western-style supermarket stores to different cities has drawn vehement protests from India's small, unregulated push-cart vegetable vendors, hawkers and the 12 million neighbourhood kirana shops (small retailers) -- all high up in India's poorly-run but very active retail ecosystem on which 200 million Indians depend and which makes up 97% of India's total retail market.

According to a 1998 census, around 45% of all unorganised retail business in India is run by groups recognised as particularly marginalised sections of society -- lower castes that in local parlance are called "Scheduled Castes" and "Other Backward Classes".

In recent months, Reliance's stores have been vandalised in the states of Orissa, Uttar Pradesh and Jharkhand

In August, in an attempt to stem the discontent and keep its voters, the government of Uttar Pradesh, India's most populous state, ordered the closure of all ten supermarkets run by Reliance Retail as it didn't want to upset shopkeepers.

In October, 5,000 unorganised retailers from all over the country, packed in buses and trucks, descended on Mumbai to lead a massive protest rally against Wal-Mart and others setting up big retail outlets in India.

"All the presence of retail giants will do is to push this section into penury," said Babu Matthew, the country director of international NGO Action Aid. "Allowing Wal-Mart and other MNCs into the Indian economy will reduce opportunities for self-employment, especially of poor people, both urban and rural, in non-agricultural enterprises."

Improving efficiency

But big retail giants such as Reliance Industries maintain that India's retail market is big enough for all players to co-exist. "Organised retail is not the evil business it is being made out to be," said Mukesh Mehta, the Managing Director of Reliance Industries, in a statement. "India's retail market is so huge that there is place for everybody, including smaller players."

Mehta also asserted that his company's retail initiative was configured to improve supply and chain distribution efficiency, promote high-tech farming methods that bring better yields, and reduce wastage.

"Currently, 30 to 35 per cent of 60 million tones of fruits and vegetables -- more than the fresh fruit produce of the UK -- are wasted due to a lack of storage and other facilities," he said. "Organised retail chains will minimise such wastage."

Changing times

However, shopkeepers like Borana -- heirs to one of the world's longest-surviving selling traditions -- complain that their business is shrinking because players like Reliance are monopolising the market, offering products at prices a small player like him cannot match.

Moreover, they manage to entice customers by advertising attractive shopping schemes through local radio and glossy print ads -- marketing stunts small shopkeepers simply cannot afford.

Mrs Rekha Satyani, 49, was a regular customer at Borana's shop for over a decade. But with a swanky new supermarket in her neighbourhood, her patronage switched. The new store, she said, suited her grocery budget and it offered a greater variety of quality products. "Aren't Indian people entitled to world-class shopping?" she asked, rustling plastic bags in her hands that bore the trademark of Reliance. "You need to change with the times."