The political stand-off over allowing foreign direct investment in the retail sector isn’t getting any better. On Tuesday Prime Minister Manmohan Singh defended his government’s decision to open up the retail industry to FDI. Speaking at a youth rally organised by Congress leader Rahul Gandhi, he said the move would create jobs in India. Singh added that foreign investment would bring in new technology, reduce food waste, and give farmers better prices for their produce. Last week the Union cabinet gave the green light to 51% FDI in multi-brand retail, and 100% FDI in for single-brand chains. Opposition parties have protested the move and blocked proceedings at Parliament.
Congress president Sonia Gandhi also spoke at the same youth rally. It was her first public speech since she returned from medical treatment in the United States. But Gandhi made no mention of the issue of FDI in retail. Some leaders from within the Congress party believe that decision was ill-timed, coming as it does just ahead of crucial state elections in Uttar Pradesh.
And finally, Indian markets fell back into the red on Tuesday, with the fight over FDI in retail spooking investors. The Sensex plunged 159 points to 16,008. And the Nifty dropped 46 to 4,805.