Rajasthan has become the second state in the country after Delhi to withdraw permission for foreign super-chains like Wal-Mart to set up shop and sell directly to Indian consumers.The new BJP government in Rajasthan, headed by Vasundhara Raje Scindia, has written to the union Commerce Ministry, stating that it will not allow Foreign Direct Investment or FDI in retail. The BJP is, in principle, opposed to permitting FDI in multi-brand retail.Ms Scindia routed the Congress government headed by Ashok Gehlot in the recent state elections.The move by the two states is certain to upset the UPA government's plans to shore up foreign investment in India. Commerce Minister Anand Sharma gave vent to the Centre's exasperation when he told reporters earlier this month that states which had given their nod to the new FDI policy could not throw it out of the window. "Option was to join...We are not a banana republic that you create policies in the name of option of revolving doors,'' he has said.With Rajasthan and Delhi withdrawing their nod to international multi-brand retain chains, the number of states opposed to the opening of such stores has gone up to 18. Andhra Pradesh, Haryana, Maharashtra and Karnataka are the only major states who remain favourably disposed to plans to embrace these mega stores.

Arvind Kejriwal, whose Aam Aadmi Party formed the government in Delhi in December, has also told the centre that while it is not closed to foreign investment in other sectors, it cannot allow foreign supermarkets because thousands of small shop owners and neighbourhood stores will be wiped out of business.In 2011, the Prime Minister said India would open up its vast retail sector to foreign investment. However, the economic reform reduced his government to a minority with West Bengal Chief Minister Mamata Banerjee and her Trianmool Congress exiting his coalition.