Global supermarkets from Tesco to Wal-Mart had their plans to crack one of the world's biggest emerging markets thwarted over the weekend when India ditched proposed reforms to open up its retail sector.
Last week, and after years of fevered speculation, Indian prime minister Manmohan Singh said foreign retailers would be allowed to own up to 51pc of supermarket chains in India.
The move effectively paved the way for the world's largest retailers to run their own shops in the $450bn (£290bn) market.
However, in an about turn on Saturday, Mamata Banerjee, chief minister of West Bengal and a member of India's fragile ruling coalition, said plans had been put on ice while a new "consensus" was formed.
The move followed protests from politicians and domestic retailers, who fear that opening up the market would wipe out millions of small-scale operators. After the news of liberalisation was announced, owners of thousands of small shops - or kiranas - took to the streets.
Chains like Tesco and Wal-Mart are keen to tap into the wealth of India's emerging middle class, expected to number 350m people by 2015.
At present, Western retailers have only been able to enter India as a junior partner with a local chain or via wholesale outlets .
At present, Western retailers have only been able to enter India as a junior partner with a local chain or via wholesale outlets .
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