India opens retail -- a little

The Indian government has taken a small step to open its retail marketplace to foreign firms. Under a new rule, single-brand retailers will be allowed to open outlets in India, although large multi-line stores (e.g., Wal-Mart, Tesco) will still be excluded.

Politics makes strange bedfellows, as the saying goes, but so does business, and when politics and business converge, it can get very strange. Opposition to the new rule was spearheaded by the Communists ( "We have been opposing it. I don't know why the government has to take such a decision,'' said D. Raja, secretary of the Communist Party of India) and business -- the Communists because they're opposed to business in general, and business interests because they don't want competition.

Still, it is a step forward, and may signal more openings to come.

Analysts said the Cabinet decision was typical of the style successive governments in India have adopted in opening any sector to foreign competition.

"India's economic reforms remain a story of incremental changes at a glacial pace,'' said Rajeev Malik, a Sinagapore-based economist with JP Morgan & Co.