India’s parliament forced to adjourn by retail FDI protest

The Indian parliament erupted into chaos and was forced to adjourn early Friday, as a key government ally joined opposition parties in a spirited protest against the government’s move to open up the market to global supermarket chains like Walmart, the BBC reports.

Late Thursday, the cabinet approved a bill to allow 51% foreign direct investment in multi-brand retail outlets like Walmart, Carrefour and Tesco, and to allow 100% FDI in single-brand stores like those selling only Nike or Reebok products.

The move was meant to signal an end to the perceived paralysis of Manmohan Singh’s United Progressive Alliance government, and a renewed drive to push through economic reforms.

The government has also argued that opening up the retail business to foreign players would create millions of jobs and bring in much-needed investment and expertise to build much needed supply chain infrastructure in the hinterland.

But opponents say the multi-nationals will squeeze out India’s smaller and poorer traders and drive down prices paid to India’s farmers, the BBC said.

India’s Hindu newspaper reported that the Trinamool Congress said its opposition to the move was in keeping with the rules governing political alliances in India.

Earlier, reports speculated that the ministry in charge of foreign investment would speedily frame the rules for implementation of the decision. However, it is not unknown for contentious legislation to go back to standing committee, or simply languish while rules are “notified,” even after it has received cabinet approval.