A plan approved by India’s cabinet to allow retail firms from outside the country to take control of retailers inside its borders has been killed by the nation’s congress. A number of big companies like Walmart (NYSE: WMT) saw the cabinet plan as a way to move into the world’s second largest nation by population. Walmart already own whole distribution businesses within India’s retail infrastructure.
The move will cost India much of its credibility with the business world which had expected the retail deal would signal an openness of the India markets, not unlike the one that has helped large companies in China.
The FT reports that
India’s ruling Congress party suffered a humiliating defeat on Wednesday after it was forced to shelve a landmark reform to open the country’s $450bn retail sector to global supermarkets such as Tesco and Walmart.