If you spin a yarn make sure you are not caught.

Target, the second largest discount retailer in the US, has just canceled all orders from Welspun India, the largest textile company in Asia and the second largest terry towel producer in the world. Why? Because Welspun was supplying sheets supposedly made from Egyptian cotton when it was using other inferior quality cotton for 2 years. Welspun stocks hit the lower circuit breaker on 2 successive days and have settled 36% down. Walmart is also looking at sheets supplied by Welspun and if that order stops as well it could lead to heavy losses. As is usual in India managers have not apologized but have tried to justify their actions by saying that it was only a matter of provenance of the cotton and customers are highly satisfied with their product. They have appointed an auditor to probe the charge. Reputation means for nothing. Last year a famous company, Volkswagen, was caught faking emissions results on its diesel cars. Volkswagen has already paid $15.3 billion in fines in the US and will have to pay hefty fines in other countries as well. Why do managers indulge in such stupidity? Fierce competition forces companies to keep prices as low as possible and bonuses for managers depend on shareholder returns. If sales are weak they probably try cutting corners and once they get away with it they may think that they will get away forever. Sadly, forever is a very long time and they always get caught. On the other hand, Walmart and Target are discount retailers which means they force prices down to bare minimum levels. Since they buy in bulk suppliers make profits on volumes. Even well known brands bargain for pennies, to increase their profits. What is the harm in that? It is common business practise to buy as cheap as possible to entice customers with low prices. In 2013, more than 1000 people died in the collapse of Rana Plaza because production had to carry on to meet orders. Consumers may feel happy buying products for cheap but it has destroyed manufacturing in western countries. These nations are researching feverishly with robotics to manufacture their own requirements but robotic factories are very capital intensive and if humans do not get jobs who will buy the products they produce? So Walmart and Target will be back, after a suitable time gap. Ranbaxy's actions were criminal. They sold the company to Daiichi Sankyo at an inflated price by hiding adverse reports by the USFDA. If it was the US the owners and managers would be serving long prison terms but in India they are walking around with big smiles on their faces. That is what gives the nation a very bad name. Lack of punishment allows business fellows to sell shoddy products to citizens, who naturally prefer to buy imported goods. That is why our manufacturing is lagging. We need to have some pride in being Indians. But that will be cursed as 'nationalism'. What to do?