Mumbai – The Indian state of Rajasthan has reportedly prohibited direct foreign investment in supermarkets located there. According to Reuters, individual Indian states are allowed to decide whether or not they want to accept direct foreign investment in local supermarkets, and so far fewer than half of India’s 28 states have done so.
The Associated Chambers of Commerce and Industry of India criticized the decision. However, Reuters also reports that the anti-direct foreign investment Bharatiya Janata Party (BJP) opposition party currently looks like it will take a majority of seats in national elections scheduled for 2014, although it will probably have to form a coalition government including pro-investment politicians. Observers are predicting the current foreign investment policy will be revised, but India will not risk banning foreign investment in its supermarket sector outright.