India’s union commerce and industry minister Anand Sharma has asserted that the government has only suspended its decision to allow foreign direct investment (FDI) in multi-brand retail in India and it has not completely abandoned its plans.

"I do not think there is a policy paralysis. Sentiment has been low. The government is committed to the reform agenda... there is only a suspension, there is no rollback of the decision. We will be talking once again with the stakeholders," he said.

The issue of FDI in retail was brought out when the minister held a meeting with several industy leaders including JK Paper managing director Harsh Pati Singhania, Ficci president Harsh Mariwala, Bharti group chairman Sunil Bharti Mittal, Sunil Kant Munjal of the Hero Group and HSBC chief Naina Lal Kidwai.

The move will allow global giants like Wal-Mart, Tesco and Carrefour to enter the Indian market.

Those who favor the deal argue that it will address the issue of supply bottle necks, develop supply chain infrastructure, reduce wastage of food and improve efficiency, besides generating employment. They also say that it will benefit farmers, who will be able to negotiate better deals with large firms and ultimately, customers, who will get commodities at a cheaper price.

Opponents argue that the allowing big international players will affect small retailers, which dot the country’s streets. They cite the examples of Thailand and Malaysia, which allowing FDI in retail has resulted in problems for small retailers.

The union cabinet’s decision to allow FDI in single brand retail sector has been opposed severely by several sections political as well as social setup in the country. The central government has also said that individual states will be allowed to veto foreign retailers. The chief ministers of Uttar Pradesh, West Bengal, Tamil Nadu and Bihar have vowed not to allow FDI in their respective states.

The ruling congress party is concerned as the opposition to the FDI not only comes from its main rival BJP but also others like AIADMK chief J Jayalalithaa, Trinamool Congress chief Mamata Banerjee and BSP chief Mayawati. The tree women Chief Ministers will have toe power to veto the entry of foreign firms into their states.