Foreign retailers seem to be awaiting the outcome of India’s national elections in April 2014 before deciding whether to roll out their operations. Not a single dollar of FDI has been invested in multi-brand retail since in India since the country overturned its ban on it in September 2012. The world’s biggest retail giant, Wal-Mart, withdrew from its six-year joint venture with Indian conglomerate Bharti in October 2013. Now, the only deal in the pipeline is UK retailer Tesco's $110m investment in collaboration with the Tata Group’s Trent Hypermarket, which was approved by the Foreign Investment Promotion Board at the end of December 2013. 

The future of multi-brand retail in India is uncertain, however, with polls indicating a high likelihood of a Narendra Modi-led Bharatiya Janata Party (BJP) victory in the forthcoming elections in India. The BJP, whose main constituents are small shopkeepers and traders, is against the multi-brand retail FDI reform. So, too, are various other political parties, barring the current ruling party, Indian National Congress. Prospects for multi-brand retail are bleak in the states of Rajasthan, Uttar Pradesh, Bihar and West Bengal. In only two Congress-ruled states, Maharashtra and Karnataka, is there space for Tesco to set up shop for now. The limited space for multi-brand retail is perhaps the biggest barrier to FDI in the sector.
 
The Congress-led United Progressive Alliance government, which allowed FDI in multi-brand retail, remains hopeful that at least one more global giant will announce its plans in the country. All eyes are on French retailer Carrefour to announce an investment, following a visit to the country by the company's CEO. But it seems as if most foreign retailers are avoiding India for now, especially as the reform is a political hot potato for the BJP, whose candidate is the front runner for the post of prime minister.
 
Mr Modi, for his part, has called upon traders not to feel intimidated by big retail chains, saying that they should learn to compete and work with them: “We should not worry about the challenges from global trade,” he told a meeting of the Confederation of All India Traders, adding that “the government should not look to curb online trade. We should not worry about these things as our children have taken IT to the world. We'll have to embrace it."

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Foreign retailers would have been more encouraged if the BJP also shifted in its steadfast opposition to FDI in multi-brand retail, however.
 
N Chandra Mohan is a business and economics commentator based in New Delhi