One of the last hurdles has been cleared for foreign direct investment (FDI) in multi-brand retail in India after the plan won a majority vote in Lok Sabha, the lower house of the parliament.

A majority of 253 of the 471 members of the house who voted approved the plan.

While the decision to allow FDI for multi-brands retailers like Walmart and Tesco does not actually require an approval from the parliament to become a law, Prime Minister Manmohan Singh agreed to have the decision undergo parliament’s consent.

“FDI in retail was a barometer to test the government’s strength and the government has proved that they have the support in the parliament to push through such reforms,” said Samiran Chakraborty, regional head of research at Standard Chartered Bank India.

According to Manish Tewari, minister of information and broadcasting, the vote was a contest between reform and regression.

“It was a vote between pragmatism and ideological blinkers. Ultimately, reforms and pragmatism have won,” said Tewari.

Pantaloon Retail India joint MD Rakesh Biyani welcomed the outcome.

“We hope that the policy will be implemented soon. FDI will be good for the Indian retail sector,” he said.

The FDI decision will now seek the approval of Rajya Sabha, the upper house of the parliament.

Singh said he is confident the upper house will support the decision.

“I am confident about Rajya Sabha,” said Singh.

GB