A key political ally is to meet on Tuesday to decide on whether or not to withdraw from the Indian government. The Trinamool Congress party has demanded that the government scrap its decision to open up India's retail sector to global supermarket chains.
India's opposition parties have called for a nationwide strike on Thursday to protest the decision. Delhi's plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.
Last year, the government was forced to suspend a similar plan amid protests.
International firms such as Walmart and Tesco will now be able to buy up to a 51% stake in multi-brand retailers. Analysts say the government has reintroduced the measure in an effort to revive a flagging economy.
Prime Minister Manmohan Singh said: "I believe that these steps will help strengthen our growth process and generate employment in these difficult times."
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