Executive Briefings

India Says "No" to Foreign Supermarket Chains, at Least for the Time Being

In a setback to economic reforms, India's government on Wednesday suspended a plan to allow foreign supermarket chains such as Wal-Mart and Britain's Tesco to operate in its burgeoning retail market.

The announcement is expected not only to deter foreign investment in Asia's third-largest economy but also to further weaken the image of a government already under fire for its inability to follow through on tough policy revisions aimed at boosting growth.

Finance Minister Pranab Mukherjee said that the plan to let in foreign megastores would be "suspended until a consensus is developed through consultations amongst various stakeholders," including all political parties. The proposal, announced almost two weeks ago, sparked nationwide protests by small, neighborhood store owners.

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In a setback to economic reforms, India's government on Wednesday suspended a plan to allow foreign supermarket chains such as Wal-Mart and Britain's Tesco to operate in its burgeoning retail market.

The announcement is expected not only to deter foreign investment in Asia's third-largest economy but also to further weaken the image of a government already under fire for its inability to follow through on tough policy revisions aimed at boosting growth.

Finance Minister Pranab Mukherjee said that the plan to let in foreign megastores would be "suspended until a consensus is developed through consultations amongst various stakeholders," including all political parties. The proposal, announced almost two weeks ago, sparked nationwide protests by small, neighborhood store owners.

Read Full Article