Market Focus : Cola Invasion Stirs Up India’s Nationalist Feelings : Socialists denounce it as a new form of colonialism and threaten to picket.

“Quit India!”

More than half a century ago, with the Japanese army advancing toward the Indian frontier and seemingly unstoppable, Mohandas K. Gandhi, the “Great Soul,” launched the call for the British to leave his country, immediately and unconditionally. His target was the injustice and humiliation of colonialism.

Now a coalition of alarmed Indian socialists has dusted off his slogan and his tactics of nonviolent protest to battle a more recent foreign foe: “cola-onalism,” the fizzy, ubiquitous drinks made by Coca-Cola and Pepsi.

“These are the two most aggressive agencies of pushing in what I consider American culture. That includes a lot of things, from junk food to Madonna to Michael Jackson,” said George Fernandes, a former minister, labor organizer and leader of the Janata Dal party.

Unless the soft-drink giants leave India voluntarily by the month’s end, starting March 1 their bottling plants and retail outlets will be picketed and trucks carrying their products will be blocked, Fernandes announced on behalf of Samajwadi Abhiyan, an umbrella alliance of socialists.

Fernandes, responsible for driving Coke out of the Indian market in 1977 (Coke returned last fall), claimed that movement organizers can count on the support of 200,000 nationalist students in universities in the New Delhi area, as well as “millions” worried that jobs in Indian enterprises are in jeopardy.

Those forecasts seem preposterous.

But regardless of how many people lie down in front of delivery vans or agree to boycott Coke and Pepsi, the “quit India” campaign, freighted with the symbols and strategy of the fight against imperialism, is a reminder of how touchy some Indian leaders and intellectuals still are about foreign penetration of their once nearly hermetically sealed economy.

“The world has changed in 50 years,”’ objected P. M. Sinha, managing director of Pepsi Foods Ltd., who claims that Fernandes and his backers just haven’t kept up. “The country today exists in a new environment of global integration.”

Pepsi, he said, will stand pat.

“Quit India” redux may be one of the last gasps of the ideal of a self-sufficient, import-free India minted in the heyday of Gandhi and Jawaharlal Nehru, India’s first prime minister.

For the last year, a new, more open India attracted more foreign investment than during the whole of the 1980s. American, as well as European and Japanese, companies are arriving en masse. Many will watch the anti-cola campaign to see whether the old slogans have any life left.

The experiences of Cargill, the U.S. grain-trading dynasty, indicate that, at least in some economic sectors or regions, foreigners may be in for a bumpy ride.

The Minneapolis-based company, one of America’s largest privately held corporations, sells hybrid sunflower and corn seed in India; in December, 1992, hundreds of militants attacked its office in Bangalore, looted the seedlings and computer records and tossed them in a bonfire outside, said Cargill’s India general manager, Raza Hasnain. Last July, a mob was back, laying waste to sections of a seed-processing plant under construction.

Cargill was targeted because of a provision in the General Agreement on Tariffs and Trade, then being debated, that allowed the patenting of new strains of seeds. Fernandes warned at the time that multinationals like Cargill “will hook farmers to their products, then raise prices. In the process, our agricultural base will collapse.”

Despite the destruction, Cargill says that it still intends to do business in India. “Neither attack has deterred us from our initial intentions: We’re here to serve the Indian farmer,” said Hasnain, whose office is now guarded by a security agent armed with a double-barreled shotgun.

Fernandes, who also tangled with Cargill over its proposal to create a giant coastal salt farm, says his concerns are economic. In an interview in the white-washed Delhi bungalow that serves as his command post, the bespectacled lawmaker claimed that over the next three years, Coke and Pepsi combined would siphon almost half a billion dollars in royalties and profits out of India. That sum, he said, would be enough to pay for the construction of 600 miles of broad-gauge railroad and to employ 30,000 people to run it.

“This is a country where four-fifths of the villages are without potable drinking water,” Fernandes said. “The law of the market cannot be allowed to operate.”

Although his party’s clout has waned, Fernandes knows that soft-drink companies pay attention when he speaks. As minister of industry in the Janata Dal government in 1977, he demanded that Coca-Cola turn over a majority share of its holdings and reveal its secret formula if it wanted to continue doing business in India. Instead, Coke left.

The world’s most popular soft drink returned to the Indian market last October, opening a bottling plant in a dusty little industrial town near Agra, site of the fabled Taj Mahal. That, and the Coke garden umbrellas that have sprouted in eateries near the Taj, is an unmistakable sign that the country that had battled imports to the point of developing domestic alternatives to Coke--Campa Cola and Thums Up--has changed.

To secure a launch pad in the Indian market, Coke entered into a $70-million “strategic alliance” with the maker of Thums Up, an Indian drinks manufacturer named Parle that boasted a 60% market share. Business insiders say the deal is a barely disguised takeover by Coke. Pepsi, meanwhile, has seized 24% of India’s cola trade.

Pepsi naturally rejects the socialists’ line of reasoning and arithmetic. It entered the Indian market three years ago, subject to a raft of government restrictions (including the addition of the Hindi word for wave, lehar, to its brand name). Its executives say that far from sucking money out of India, they are enriching it.

“In three years, we have grown to be one of the largest exporters; in the next five years, we should be one of the top five,” said Sinha, the Pepsi manager. “As of today, we have almost brought in $50 million in foreign exchange. I don’t think that in the next 10 years a single cent will go out of this country. We are now in an investment phase.”

In Madras, Pepsi is building a $27-million plant to manufacture plastic bottles. The company just received a $20-million order to ship returnable glass bottles to the Persian Gulf. Pepsi also plans to open Kentucky Fried Chicken and Pizza Hut restaurants, thereby creating more Indian jobs, Sinha said.

The cola merchants look upon India with unconcealed ambition because of its growth potential. Soft-drink consumption averages a paltry three bottles per capita each year, compared to a reported 750 in the United States and more than 1,100 in Mexico.

Fernandes says that India already has its own colas and that foreign concoctions are really no different, so India isn’t getting any advanced foreign technology in return for permitting market access.

In a larger sense, he is concerned about India as it exists today--a country where vast private wealth and 60% illiteracy and widespread poverty coexist. “Unless there is a return to Gandhi, we are lost,” he said.

Last year, Fernandes and his followers dusted off another Gandhian action--the famed “salt march” staged by the Indian nationalist in 1930 to protest the British government monopoly on salt--and used it against another Cargill project.

Depending on whom one listens to, the campaign worked, or it didn’t. Cargill wanted to build a salt works in the Gujarati port of Kandla and promised the Indian government to export its entire 1-million ton annual output of industrial salt. The government gave its approval.

“Their plant would have meant massive unemployment in the salt sector, where 150,000 Indians are employed,” Fernandes claimed, disputing Cargill’s contention that it would not produce for the domestic market. He launched a civil disobedience movement he says mobilized 20,000 people in Uttar Pradesh state alone.

Hasnain acknowledges that Fernandes did slow the project. But there were other factors, he said, including suspicions by some Indians of CIA involvement. The clincher proved to be the economic downturn experienced by Japan, the plant’s target market. When it became clear that Japan wouldn’t be able to absorb an additional million tons of industrial salt, Hasnain said, Cargill shelved the idea, at least for now.

Pondering the arguments of socialists like Fernandes, India-born Hasnain rejects them as having failed miserably. “Our umbilical cord always was to the Soviet Union. We regarded foreign investment as an enemy. And look where we are today,” the Cargill executive said. “In 1960, South Korea and India had the same gross domestic product per capita. Today, South Korea’s is 10 times higher.”