India Suspends Plan to Allow Foreign Retailers

Posted December 7th, 2011 at 1:50 am (UTC-5)
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India’s government has suspended a plan to open the country’s retail sector to foreign companies, following weeks of protests that have brought parliament to a halt.

The government said Wednesday the plan will remain on hold until the stakeholders can reach a consensus.

Opponents say allowing foreign retail chains, such as Walmart, will threaten the survival of millions of small shop owners in the country. Shopkeepers held a one-day strike last week to protest the plan.

Industry leaders share the government’s view that modernizing India’s retail sector will benefit farmers and consumers, while creating millions of jobs.

India’s $450-billion domestic retail market is dominated by family-run stores, and global retail companies have waited for years for India to allow them to operate in the country.

The government plan called for allowing foreign firms to own up to 51 percent of so-called multi-brand retail companies in India, such as supermarkets. Companies could also own up to 100 percent of stores that sell just one brand of a product.

The stores would be allowed in cities with a population of at least 1 million people.