Source: The New York Times
NEW DELHI — Facing a harsh political reaction that has paralyzed the Indian Parliament, the governing Congress Party announced on Wednesday that it would suspend plans to allow foreign multibrand retailers like Wal-Mart to open stores in India.
The decision, announced in Parliament, was a setback for Prime Minister Manmohan Singh and seemed certain to deepen criticism that his administration had become increasingly adrift and ineffective. Foreign corporations eager to enter the Indian retail market must now also put aside any expansion plans.
“Government will take a decision after a consensus is developed,” Pranab Mukherjee, the Indian finance minister, said in announcing the suspension.
The question is whether the government will try to resurrect the plan in the weeks or months ahead. The Indian economy has been slowing in recent months, partly because of the global economic downturn but also, many analysts say, because of the inability of the government to pass crucial reforms, including on foreign retail investment.