The Indian government has won a key vote on its plans to open the country's retail sector to Foreign Direct Investment.
MP's in the Lok Sabha approved the plan after weeks of debate, paving th
e way for foreign firms like Tesco and Walmart to invest up to 51% in multi-brand retail.
The Congress Party victory is expected to provide a fillip to the government's plan to push ahead with much needed economic reforms aimed at arresting an alarming slide in the country's growth.
Opposition groups say allowing foreign firms to set up supermarkets will put small shop owners out of business and hurt the poor.
Commerce Minister Anand Sharma however, defended Foreign Direct Investment (FDI) in saying it would benefit farmers.
"We do not have the requisite infrastructure to manage our produce. Farmers suffer due to lack of infrastructure," he said.
The decision to open up India's $450 billion retail sector to foreign chains was announced in November by the government of Manmohan Singh as a way of improving efficiency in a sector that has long been dominated by small and medium scale businesses.
The decision however, caused widespread uproar, forcing the government to put the measure to a vote.BLOG COMMENTS POWERED BY DISQUS