Opposition to Retail Reform Halts India’s Parliament

Posted November 28th, 2011 at 9:20 am (UTC-5)
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India’s parliament abruptly adjourned Monday following an uproar by lawmakers opposed to the government’s recent decision to allow foreign retailers into the country.

The Cabinet last week approved a measure allowing global firms to own up to 51 percent of multi-brand retail companies in India such as supermarkets. Foreign companies can also own up to 100 percent of single-brand retailers.

Indian officials have said the reform will create millions of jobs, but critics, including the country’s main opposition Bharatiya Janata Party, say smaller retailers will be wiped out, leading to higher unemployment.

On Monday, lawmakers from opposition parties and from within the ruling Congress Party-led coalition stood up, waved signs and yelled slogans against the new retail policy, forcing parliament to adjourn until Tuesday.

The chief ministers of some of India’s most populous states, including Uttar Pradesh, Tamil Nadu, and West Bengal, say they oppose the plan to allow foreign retailers in.

The new foreign-owned stores will be allowed to set up shop in cities with a population of at least one million. They must invest at least $100 million and half of this would have to be invested in rural infrastructure and refrigerated transport and storage. Thirty percent of their produce would also have to come from small and medium enterprises.

Global retail giants, including U.S.-based Wal-Mart and France’s Carrefour, have waited for years for India to open its $450 billion domestic retail market, which is dominated by family-run stores.

India’s retail sector is the country’s second biggest employer after agriculture.