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India 'Suspends Supermarket Plan'
BBC NEWS, INDIA
December 6, 2011: India's government has told opposition leaders that it has put on hold plans to open up the retail market to global supermarket chains, reports say. Finance Minister Pranab Mukherjee spoke to leaders of the main opposition Bharataiya Janata Party (BJP) and Communists on Monday. He has called an all-party meeting on Wednesday morning to discuss the issue.
The decision to allow chains such as Walmart and Tesco into India has sparked fierce opposition. Over the weekend an ally of the governing party said they had been told the policy was being put on hold.
Ever since the cabinet approved long-awaited proposals to raise the limits on foreign investment in end November, opposition parties have stalled parliament. Critics fear the move would destroy millions of jobs and businesses.
Criticized
On Monday, Mr Mukherjee spoke to BJP leaders LK Advani and Sushma Swaraj and Communist Party of India (Marxist) leader Sitaram Yechury. The opposition leaders suggested to the minister to call an all-party meeting to make a formal announcement.
It is not yet clear whether the opposition will return to parliament or whether they will insist on a complete rollback on the decision. The government has been criticized for not taking the opposition into its confidence before announcing the retail plan.
Last week, Mamata Banerjee, whose Trinamool Congress party contributes 19 votes to the ruling Congress party-led coalition, said Mr Mukherjee had told her that the policy would be put on hold. Ms Banerjee, chief minister of West Bengal, told reporters in Calcutta: "He has told me that the decision will not be implemented unless there is consensus on the issue."
Caps raised
Recently, the government announced that the cabinet had agreed to 51% foreign ownership of multi-brand retail stores, allowing groups like Wal-Mart and Tesco to open stores. Currently, such operators can only sell wholesale in India but not directly to customers.
The cap on single-brand stores - such as Apple or Reebok - was to be raised from 51% to 100%. A decision on the issue has been pending for two years.
Opposition leaders say the government is misleading the country about the benefits of foreign supermarkets. They say the multi-nationals will squeeze out India's smaller and poorer traders and drive down prices paid to India's farmers.
The original announcement was welcomed by the Retailers Association of India which said "consumers will have many more choices". Supporters of the move say it will increase competition and quality while reducing prices, which have been hit by close to double-digit inflation.
