India Deadlocked on Retail Reform Bill

Posted November 29th, 2011 at 7:10 pm (UTC-5)
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The Indian government failed Tuesday to win support from parliament on a measure to let foreign retailers into the country.

A meeting of lawmakers from all parties broke up with no deal.

The Indian Cabinet approved a measure last week which would let global firms own up to 51 percent of so-called multi-brand retail companies in India such as supermarkets. Foreign companies could also own up to 100 percent of stores that sell just one brand of of a product.

India’s main opposition Bharatiya Janata Party says the reform will wipe out smaller retailers and lead to higher unemployment. Some members of the Congress Party-led coalition government and chief ministers of some of India’s most populous states also oppose the measure.

Indian Prime Minister Manmohan Singh says the reform will bring down food costs and create jobs. U.S. State Department spokesman Mark Toner says the proposal will create new economic opportunities and more choices for Indian consumers.


The new foreign-owned stores would be allowed in cities with a population of at least 1 million. The retailers must invest at least $100 million in the cities. Food retailers would also be required to buy 30 percent of their produce 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.