India's Lawmakers Endorse Looser Retail Rules

Would allow for more foreign markets to set up shop in country


India's government scored a major victory in Parliament on Friday, with the upper house supporting a decision to allow foreign supermarkets—such as Wal-Mart Stores and Tesco Corp.—to set up shop in the country.

Lawmakers in the Rajya Sabha, or the upper house, voted 123 to 109 to defeat the opposition's demand to scrap the decision to allow up to 51% foreign direct investment in the multibrand retail segment.

The lower house on Wednesday had cleared the proposal, which New Delhi says will help bring in capital, improve the supply chain and create jobs.

Although the vote was symbolic, because the mid-September executive decision to allow in foreign investments didn't require lawmakers' approval, a loss would have embarrassed the government. It would have meant the move lacked legislative support, and would have hurt the government's image before crucial state elections this year and next.