Connect to share and comment

Indian parliament opens door to foreign retail investors like Wal-Mart

India's lower parliament may have opened the door to foreign retail investors like Wal-Mart.

India foreign retail investment walmart december 5 2012Enlarge
India's lower parliament voted down a measure prohibiting large foreign retailers from entering the country on December 5, 2012, potentially opening the door to companies like Wal-Mart. (NOAH SEELAM/AFP/Getty Images)

The Indian parliament's lower house voted on Wednesday to allow foreign retail investors like Wal-Mart into the country.

According to the Associated Press, the government won with 253 votes, while 218 voted against the measure and 43 lawmakers from socialist parties abstained. Critics of the measure said it would crush small shop owners and farmers.

The New York Times noted that the topic of foreign retailers has been under debate in India for years, but was pushed by the Congress government, which has been fielding accusations of being corrupt and paralyzed.

The move would allow foreign supermarkets to operate in what is now Asia's third-largest economy. Reuters noted that it also gives Prime Minister Manmohan Singh a much-needed boost while he attempts to push through a second wave of economic reforms through parliament.

Passing this measure now allows voting on bills aimed at attracting foreign investment to the pension and insurance industries, said Reuters.

More on GlobalPost: Pakistan's Interior Minister to reveal Benazir Bhutto killers in book

Singh said the vote was a pragmatic one, and a victory for economic reform, according to the AP. 

"Foreign companies are keen to expand their businesses in India as they see this as a big market. But our small businesses and traders will be wiped out," said Sushma Swaraj, of the main opposition Bharatiya Janata Party.

Meanwhile, Commerce Minister Anand Sharma said the introduction of big retail companies would improve food infrastructure by providing incentives for more investment.

"Around 35 percent of the fruit and vegetables grown in the country rots in the field due to the absence of cold storage facilities. This decision will strengthen the backend infrastructure and cut down the enormous wastage of food produce and grain," he said, according to the AP.

The upper house of parliament is set to debate the issue next.

More on GlobalPost: North Korea one step closer to long-range missile test

http://www.globalpost.com/dispatch/news/regions/asia-pacific/india/121205/indian-parliament-approves-foreign-retail-investors-