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Why India pulled the welcome mat for Wal-Mart

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Ilyas, who goes by one name, plays dual roles as a middleman buying fruits and vegetables from whole-salers and running a roadside stand. Like Malik, he thinks he can compete. "Even though big stores may be able to sell for less, they can't keep their fruits and vegetables as fresh as mine," he says. "My customers are willing to pay more for quality."

Job jitters

While Malik and Ilyas may not seem concerned about the coming of the big shops, millions of others worry that they could lose their jobs. Responding to that anxiety, opposition parties blocked the government's decision to allow foreign, multibrand retailers, such as Wal-Mart and Tesco.

"The economy as a whole can only gain if the presence of foreign retailers creates more opportunities for the manufacturing sector, as opposed to being threatened by it," says Rajeev Chandrasekhar, one of the members of Parliament who blocked the measure.

The failed resolution left economist Rajiv Kumar, the secretary-general of the Federation of Indian Chambers of Commerce and Industry, fuming.

"Those who have opposed the entry of foreign direct investment [FDI] in multibrand retail have done this without recognizing that this is a sector that remains backward, dominated by a cash economy, with all its features of nonaccountability, and has poor to horrible working conditions," he says.

Prime Minister Manmohan Singh has argued that opening the sector would create 10 million jobs and cut India's rising food-price inflation.

Currently, 40 percent of fruits and vegetables rot before they can be sold due to a lack of cold-chain systems or refrigeration from farm to store. Under the government's plan, multinationals would be required to invest $100 million over five years, and at least half of that must go to building a cold-chain system and rural infrastructure. Supporters argue the investments could help provide food to millions of people in a country racked by malnutrition.

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