Bowing to political pressure from opposition parties and coalition allies, the Indian government has put on hold its initiative to loosen restrictions on foreign investment in the country’s retail sector.
According to a report by Food Navigator-Asia, the government has temporarily shelved the plans over concerns the bill could be blocked in parliament.
The new rules would allow foreign companies a 51 per cent stake in multi-brand retail and 100 per cent in single-brand retail.
It has emerged, the news source reported, that Mamta Banerjee, chief minister of West Bengal and leader of the Trinamool Congress, an ally of the ruling majority, is opposed to the decision to further open the retail sector to foreign investment.
Without his influence the Congress party, which is the largest ruling group in the coalition, could struggle to pass the bill.
“I can confirm that the decision to open up the retail sector has been put on hold pending further internal discussions. The government is aware of concerns of allies and would consult with them again,” a source told FoodNavigator-Asia.
According to the news agency, the source, who works for a ministry closely linked to the matter, said the government had made the opposition aware of its new position.
“I am told that they would be involved in the collaborative process before any new decision is made on the allowing of FDI in retail,” the source added.
