Indian retail stocks fall on stalled supermarket plans

Indian customers browse the shelves inside a departmental store in New Delhi The government is struggling to push through a plan to open up India's retail sector Shares in Indian retailers have fallen after the government put on hold plans to open up the retail market to global supermarket chains. Pantaloon Retail India, the largest in the country, was down by as much as 11% on Monday. Its smaller rivals Shopper's Stop and Trent also dropped 9% and 4% respectively. The government has paused proposals to open up the sector just days after approving them. It faces stiff opposition to its plans to raise the limit on foreign investment. The move would have allowed global giants such as Walmart and Tesco to own as much as a 51% stake in a retail chain. It was seen as positive news for local brands which would get easier access to international investment. The halt has been greeted with dismay by analysts who believe India needs to attract overseas investment. "This sends a very negative message to foreign investors," said Arvind Singhal, chairman of Technopak, an India retail consultancy. "What is worse is that once this reform passes, if it passes, foreign investors have no guarantee that things are not going to be reversed after a year or two."