India's Supermarket Crisis Deepens

Opposition parties and trade unions in India are staging a day-long strike over plans to open the country's retail sector to global supermarket chains. Workers blocked railway tracks in Uttar Pradesh and Bihar states, and the opposition strongholds of Calcutta and Bangalore were virtually shut down.

The reforms are essential to revive India's slowing economy, ministers say.

"Multinational companies will destroy the economic and social fabric of the country and will adversely impact traders, transporters, farmers and other sections of retail trade," Praveen Khandelwal, the head of the group, was quoted as saying by AFP news agency.

The Government's plan is aimed at reviving a flagging economy, as well as avoiding the threat of a downgrade in India's credit rating, but small shops fear they will be put out of business.

A Delhi-based trader Deepak Sethi said shopkeepers would lose business if foreign supermarkets were allowed into India.

"These big companies can attract customers by selling at cost prices. That means people here are going to lose jobs. Shops like ours will be hit the most."

Under the government's proposal, global firms - such as Walmart and Tesco - will be able to buy up to a 51% stake in multi-brand retailers in India. Multinational retailers already have outlets in India, but at present they can sell only to smaller retailers. This decision allows them to sell directly to Indian consumers.

Indian Prime Minister Manmohan Singh has said the reforms would "help strengthen our growth process and generate employment in these difficult times".