Official : Indian government halts foreign retail plan

India's government on Wednesday suspended its plans to throw open its huge retail sector to foreign companies such as Wal-Mart in a decision seen as a major capitulation to political opponents. The initial decision last month to allow foreign companies to own 51 per cent of supermarkets in major cities and 100 per cent of single-brand stores was hailed by the business community as a long overdue reform. The government said foreign retailers would bring better prices for farmers and lower prices for consumers by cutting out middlemen and upgrading the country's infrastructure. However, opposition parties and even some members of the governing coalition protested against the deal, saying it would crush local mom-and-pop stores that are the heart of Indian retailing. Opposition lawmakers disrupted Parliament for days in protest. On Wednesday, the government held a meeting with all the parties in Parliament and told them it was putting the decision to allow foreign direct investment on hold in exchange for them allowing the legislature to function. "FDI is being suspended," Farooq Abdullah, a Cabinet minister, said without clarifying how long the suspension of the decision would last. "Parliament is going to function ... everyone has agreed."