November 29th, 2011
02:57 PM GMT
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New Delhi, India (CNN) - India's federal government is facing ongoing disruption as the battle continues over its decision to allow foreign supermarkets into the nation's $450 billion retail market.

The uproar by lawmakers forced an abrupt adjournment of India's parliament for another day Tuesday. The impasse has also been stalling key legislative business, including the passage of an anti-corruption bill. An all-party meeting to end the deadlock has also failed.

Prime Minister Manmohan Singh, meanwhile, is defending last week’s decision to allow international supermarket chains into the country’s retail sector, saying it was “well considered.”

But he faces fiery protests, with those opposing the measures saying foreign competition will eliminate hundreds of thousands of small, family-run businesses.

Nitish Kumar, a widely-respected politician and chief minister of Bihar, one of India's most impoverished states, said he opposed it "tooth and nail... it will ruin retailers and will lead to a point of unemployment beyond imagination in the country."

J. Jayalalithaa, the chief minister of India's fast-growing, southern state of Tamil Nadu - where at least three big cities are located - says she will deny access to foreign retail companies at the outset. "My government will not allow multi-brand global players as permitted under the new policy to set up their hyper markets in Tamil Nadu," she said.

And the leader of the nation's most populous Uttar Pradesh state warned the new regulation would "bankrupt" her province. "If this in retail is allowed, Uttar Pradesh will become kangal (meaning bankrupt in Hindi) in the next five years as local traders will be forced to shut shop," said Mayawati, the state's chief who goes by one name.

Few regions in a country of 1.2 billion consumers have been supportive of the government's new retail policy, which triggered a full-scale political brawl in the national assembly in New Delhi.

The main opposition Hindu nationalist Bharatiya Janata Party, which is also in power in several states, is demanding an immediate reversal of the move.

"Allowing FDI (foreign direct investment) in retail is a lopsided decision," said BJP leader Murli Manohar Joshi. "Wal-Mart is not the solution to our economic problems. Why do you want to bring a U.S. ailment here?" the veteran lawmaker argued, referring to the American company as emblematic of global hypermarkets.

Even some within Singh's coalition were critical.

The Trinamool Congress Party, a federal ally that rules West Bengal state, echoed the widespread opposition. So did the Tamil Dravida Munnettra Kazhagam political grouping, another member of the ruling alliance.

Singh's government argues the move will free up a long-protected sector and – amid soaring prices – will help curb inflation. The country’s commerce ministry forecasts an increase of 1.5 million front line jobs over the next five years, with the additional back office jobs pushing that number up to 1.7 million.

And there are supporters outside government. The Confederation of Indian Industry (CII), the nation's top business lobby, hailed the move toward foreign investment in retail as a "360-degree advantage" for the country. "In a true potential scenario, opening up of FDI can increase organized retail market size to $260 billion by 2020," the group said.

But the many critics remain unconvinced and the parliamentary stalemate looks set to continue. Praveen Khandelwal, whose Confederation of All-India Traders has called for a nationwide market shutdown for December 1 , says the government’s claims are "hollow."

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soundoff (19 Responses)
  1. Tonelok

    Welcome to a global economy. If a company can come in and sell things cheaper and better, then it can't be bad. These markets would hire thousands of employees and save customers more money. If you don't like it, do what snooty American's do, just don't shop there. It isn't that hard. You have the choice as a consumer to shop at the mom and pop shop or the retail chain.
    If they are so worried the chains will destroy their businesses then I would be worried they are extorting the population. If shopping at walmart will save enough money that people will be forced to shop there shows me that the local shops aren't competetive at all and need to be out of business anyway.

    November 29, 2011 at 4:50 pm |
  2. Anna Hazare

    This country is hopeless

    November 29, 2011 at 5:07 pm |
  3. consiracy_theorist

    Apparently Walmart has not bribed indian politicians enough:) the momemnt that happens, all this noise will settle

    November 29, 2011 at 5:08 pm |
  4. manmohan_sonia

    India has no goals. Walmart is just a supermarket ........i don't no why people are crying,its simple if you don't like Walmart.... don't shop there.

    November 29, 2011 at 5:26 pm |
  5. BBC

    Any policy allows foreign company put local interest at risk will get the same reaction. Protectionism overrules far and wide, all over the world. That no such thing as “Free Market”. Not even in the USA.

    November 29, 2011 at 6:26 pm |
  6. Myto Senseworth

    No wal-mart? Now I want to move to India.

    November 29, 2011 at 6:26 pm |
  7. Myto Senseworth

    There are so many businesses in small town USA that have closed because they could not compete with a company that large. When this happens, there is no chance for the small business owner to survive. Then the product selection is dictated by the retailer and the people have no choice but to buy what the retailer wants to this case the wal-mart brands...

    November 29, 2011 at 6:41 pm |
  8. JJ Cale

    Look what free market did to Detroit! Its good to open market for Forgein Companies , but do it slowly and step by step.
    Indians are clever & IAm sure they dont want Chinese Junk through Walmarkt. Let the American Red Necks buy it!

    November 29, 2011 at 6:43 pm |
  9. JJ Cale

    Myto Senseworth

    WELL SAID MYTO SENSEWORTH !There are so many businesses in small town USA that have closed because they could not compete with a company that large. When this happens, there is no chance for the small business owner to survive. Then the product selection is dictated by the retailer and the people have no choice but to buy what the retailer wants to this case the wal-mart brands...

    November 29, 2011 at 6:44 pm |
  10. William

    Oh I see how this works. India's government is completely fine with accepting the jobs that have been outsourced by foreign companies, but when it comes to foreign retailers wanting to compete in India it's a problem.

    November 29, 2011 at 6:46 pm |
  11. Myto Senseworth

    Global economy = a few get richer as the rest of the world gets poorer.

    November 29, 2011 at 6:54 pm |
  12. dale

    my answer is we will just stop buying you cheap crap and go somewhere else and boycott your stuff it's a two way street even those your's is just dirt

    November 30, 2011 at 4:35 am |
  13. Rahul Jain

    India definately need FDI IN POLITICS. ....... 100 %%%%%%%%%%%%

    November 30, 2011 at 7:32 am |
  14. Sumit

    India do not need Wal-Mart because they sell cheap chinese stuff because they make max margin from it. You will rarely find any thing not manufactured in China. They pay minimum to their employees , employee get pittance and top management draws hefty bonuses at the cost of people. You can feel the racialism( i worked in there) and most important they will take the wealth out of the country. Only corrupt congress can support them. They say it will generate 1.7 Million jobs but it will eliminate 170 million instead. It will kill millions of retailers countrywide. It will be a doom.

    November 30, 2011 at 7:15 pm |
  15. Sunnyleone

    This is pure politics. Congress party took this decision with just one aim. Agitate everyone and divert attention of people and oppositions to kill Anna Hazare movement for Janlokpal bill in winter session. Parliament will not function and the bill can not be passed. As simple as that. But, they dont know India is going to look like Egypt come 27th Dec and the new year 2012 in Delhi would be similar to new year 2011 in Tahrir Square.

    December 1, 2011 at 7:26 am |

    Well,Internal dynamics of India is tooo complex

    December 2, 2011 at 11:09 am |
  17. Anna2

    India can never be a developed country, just forget it its has very high corruption, I have no hope.

    December 3, 2011 at 3:42 pm |
  18. nigeria

    yes they should not allow them to enter there if not india will be like north korea.

    December 6, 2011 at 5:41 am |
  19. 18 inch brazilian remy hair

    Will you kindly drop me a mail*~*

    December 17, 2012 at 2:38 am |

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