Should retail FDI be liberalised in India?

97% of retail sales are made in more than 15m tiny mom-and-pop ('kirana') stores. The government bans foreign retailers from selling direct to individuals, but allow them to set up wholesale/cash & carry, as well as sourcing companies which supply a local retail partner. Woolworths was first to do this, in partnership with Tata, India's second-largest firm. Tesco is expected to follow soon, and Wal-Mart and Carrefour are also thought to be searching for a way in. Industrial conglomerate Reliance Industries is to spend 250 billion rupees ($5.5 billion) on big new shops over five years. And big foreign companies are moving in too. The Indian Commerce and Industry Minister Kamal Nath has said that the country will soon announce further liberalization in its foreign direct investment policy for the retail sector. However the policy will still aim to ensure that large retail chains do not harm smaller neighbourhood stores, encouraging international retail chains to become suppliers to smaller shops. There is strong local opposition to liberalisation, including from the Indian National Trade Union Congress.