LONDON The government is committed to opening its retail sector to foreign investment and will not reverse its stance, Trade Minister Anand Sharma said on Thursday, declining to say when the long-delayed reform could be announced.
Investors were rattled by fresh signs this week that India's government coalition may hold off on widely anticipated reforms, especially on the $450 billion supermarket sector, because of renewed opposition from coalition allies.
Sharma, in London to attend a pre-Olympics conference, declined to say if the decision could be announced, as many have expected, before the next parliament session on August 8.
"We are committed, we have taken the decision and we are building a strong consensus and we are not reversing our decision," he said. "It is being held in abeyance, it is on pause button... But it is a political call. We want to do this and I am not the only one."
India last year scrapped plans to allow up to 51 percent foreign ownership of multi-brand retail because of political opposition, just days after opening up the sector.
The situation is seen as make-or-break for India and vital for foreign investment, economic growth and the current account. Opening up retail is expected to unleash massive inflows from foreign retailers such as Tesco and Wal-Mart but some Indian politicians fear losses for small local stores.
"Policymaking is the right of the executive..(But) we are trying to have a large consensus... Some political parties have reservations, they remain disconnected with the rest of the world," Sharma said.
While India's stubbornly high inflation has come off peaks, a poor monsoon this year with rains some 22 percent below forecasts has raised the spectre of drought and renewed inflation pressures.
This was a serious concern, Sharma said though he added that India had sufficient buffers of cereals. Oilseeds and pulses were the most affected and imports could rise.
"We will ensure availability is there to make sure speculative inflation doesn't take place," he said. "My worry is if we import more, our import bill goes up."
(Reporting by Sujata Rao; editing by Ron Askew)