x Abu Dhabi, UAESunday 23 July 2017

Indian government wins vote on supermarket reform

ndia's fragile ruling coalition won a vote yesterday on allowing foreign supermarkets to operate in the country in a test of support for the prime minister's minority government.

Indian people shop at a Bharti-Walmart store on the outskirts of Chandigarh, India. Despite opposition, the Indian government has decided to open the country’s retail sector to multinationals.
Indian people shop at a Bharti-Walmart store on the outskirts of Chandigarh, India. Despite opposition, the Indian government has decided to open the country’s retail sector to multinationals.

NEW DELHI // India's fragile ruling coalition won a vote yesterday on allowing foreign supermarkets to operate in the country in a test of support for the prime minister's minority government.

The victory gives Manmohan Singh a much-needed boost at a time when he is trying to drive a second wave of economic reforms through a fractious parliament. The debate over retail reform has proved a costly distraction for the government and has already eaten up two weeks of the month-long parliamentary session.

The vote now clears the way for voting on bills aimed at attracting foreign investment to the ailing pension and insurance industries, two measures seen by financial markets as important steps towards further liberalising an economy in the midst of a slowdown.

Expectations the government would win drove India's stock market to a 19-month high yesterday.

The vote in parliament's lower house, which the government won thanks to abstentions by two powerful regional parties, was non-binding. However, a loss would have made it harder for Mr Singh to defend the policy to bring global chains such as Wal-Mart to India's US$450 billion (Dh1.65 trillion) retail sector.