India confirms suspension of retail reform

India’s parliament has resumed after the government confirmed that it was suspending a plan to open up the retail market to global supermarkets.

The decision has been suspended “till a consensus is developed through consultation among various stakeholders”, a statement said.

The parliamentary session was deadlocked for two weeks after the opposition parties protested the move.

The decision to allow foreign chains into India has been fiercely opposed.

Critics say the move will destroy millions of jobs and businesses in the small retail sector.

Supporters say it will widen consumer choice, reduce waste and improve security for farmers.

Finance Minister Pranab Mukherjee told the parliament on Wednesday that the government would “take a decision [on retail reform] after a consensus is developed after consultations with all stakeholders”.

The stakeholders include chief ministers of states and all the political parties, he said.

Mr Mukherjee hoped that the parliament would begin functioning “as only 10 days are left for the session to end”.

‘Virtual rollback’

Earlier on Wednesday, the government confirmed at an all-party meeting that the controversial retail reform was being put on hold.

“It is a virtual rollback. It is a victory for democratic forces,” said Gurudas Dasgupta of the Communist Party of India (CPI) who attended the meeting.

However, Minister of Renewable Energy Farooq Abdullah said a decision on retail reform had only been suspended, and there had “been no rollback”.

Analysts say the decision is a blow to the government’s image, and wonder why it did not evolve a consensus before announcing the move.

“The prime minister’s image and the government’s image will be definitely dented,” said Neerja Chowdhury, a senior journalist.

Business leaders have criticised the opposition to retail reform.

In an open letter, former Hindustan Unilever chairman Ashok Ganguly and Deepak Parekh, chairman of the Housing Development Finance Corporation, said opposing the reform was “to the detriment of the vast majority”.

The government announced on 24 November it would allow 51% foreign ownership of multi-brand retail stores, allowing groups like Wal-Mart and Tesco to open stores.

Currently, foreign-owned multi-brand retail operators can only sell wholesale in India, not directly to customers.