On Thursday, the cabinet agreed to allow 51% foreign ownership of multi-brand retail stores. It is an executive decision and does not need a vote.
But opposition politicians say the move will damage India’s small retailers.
And parliament has been in uproar, adjourned repeatedly over the issue.
A leader of one of the opposition parties, Satish Mishra, told reporters after Tuesday’s meeting that the government had asked for more time “to think on the issue”.
Opposition politicians said at the meeting that they would not allow parliament to function until the government rescinded the decision.
Foreign investment ‘solutions’
But the Congress-led coalition government says that retail reform will create tens of millions of jobs.
By allowing for 51% foreign direct ownership (FDI) of multi-brand retail stores, groups like Tesco and Wal-Mart can open stores. Such operators can currently only sell wholesale in India and not directly to customers.
Earlier Commerce Minister Anand Sharma wrote a letter to the political leaders saying the absence of proper supply chain, cold storage infrastructure and logistics were hurting Indian farmers and that foreign investment in retail will help solve those issues.