Virtually all major industry bodies today expressed regret over the government pulling back on its decision to allow foreign investment in multi-brand retail.
"It is highly regressive … for the growth of this vital sector of the economy, which is likely to result in strong linkages with the farm sector and for the economy as a whole, it is imperative that reforms like these should take place," Harsh Mariwala, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), said.
The Confederation of Indian Industry (CII) said the decision to hold back FDI in multi-brand retail would have a strong impact on domestic and foreign investor sentiment.
"We firmly hope that this would not be a rollback and a quick consensus is reached," CII director general Chandrajit Banerjee said in a release.
The Associated Chambers of Commerce and Industry echoed these views. Assocham secretary-general D S Rawat called the volte face a ''missed opportunity'' and said, "It will send a very negative message to foreign investors."
Rawat said FDI in multi-brand retail could have created over 10 million jobs in three years, curbed wastage of farm products and benefited farmers through better prices for their produce.
Paresh Parekh, partner (tax and regulatory services) at Ernst and Young said, "This is a major setback because I had already started getting enquires from foreign retailers, who are now confused if this is a holdback or a rollback. This is not going to be viewed very positively."
Other big retailers like Aditya Birla Retail and Bharti Walmart expressed their disappointment in similar terms.