Certain habits in Indian life once gave an illusion of permanence. On hot afternoons 30 years ago, for example, you could lie on your bed under a slow-turning fan and hear noises from the street that had been the same for at least a century. The lonely wife in Satyajit Ray's film Charulata heard them in the film's celebrated opening sequence as she flitted about her Victorian mansion in 1870's Calcutta like a trapped butterfly, and in 1982 you could hear them still: some rhythmic chanting, the hollow patter of a little drum. And if, like Charulata, you went to the window and looked down, there in the dusty lane you would see a gang of coolies shouting something like a work-song as they pushed a wooden-wheeled cart with a heavy load, or a street entertainer drumming up business with his tabla. The most common sounds, however, were the singsong calls of peddlers selling fish or vegetables, or milky sweets and ancient biscuits from a portable glass case. Some salesmen rode bicycles; that transport apart, these were scenes that looked as if they had existed for centuries and would never be expunged by modernity.

Their extinction is coming – not immediately and not everywhere, but probably inexorably in the middle-class districts of the big Indian cities, now India's governing coalition has said it will open up the retail market to foreign supermarket chains. The coalition put the plan on hold last year after some of its smaller parties, notably West Bengal's Trinamool Congress, branded it as against the interests of "the common man". The postponement suggested a weak and muddled government. Economic growth was faltering, the prime minister, Manmohan Singh, looked particularly ineffectual, and the administration's reputation suffered the lash of critics at home and abroad (not least in the USA). Last week it decided to face down opponents and show its free-market muscles by reviving planned reforms that will allow familiar European and American names – Walmart, Tesco, Carrefour — to build stores in cities of more than a million people, providing the local state government agrees.

Western supermarkets arrived in China several years ago and there is now hardly a country in the world without them. India's resistance came out of what Louise Tillen, an academic at the India Institute in King's College London, describes as a "compound of opportunism and ideology" in a democracy that tolerates dissent and political fixes, but that resistance looks to have collapsed. The government says the marketing, technical and managerial expertise of the big supermarkets will transform food production and consumption by cutting out middlemen and building the system known as "the cold chain" that delivers fresh food swiftly from the field to the shelves. The farmer gets higher prices, the consumer pays lower ones and less food is wasted: the supermarkets hire staff in their thousands, no food rots in the warehouses.

Perfection! Unless you are a middleman, or one of India's 12 million small retailers, or a peasant farmer with a crop yield too insignificant to interest Walmart, or a street vegetable peddler. The process is known as "retail Darwinism". In Vietnam, to quote a recent survey, a supermarket needs 1.2 people to sell a tonne of tomatoes rather than 2.9 people for every tonne in more traditional distribution channels. In several large Indian cities, fruit and vegetable sellers have already seen their incomes cut by up to 30% since the advent of smaller Indian-owned supermarkets; the powerful giants from abroad could bring far larger changes.

How does India's cultural elite – with apologies for that clumsy phrase – feel about this revolution? To judge from my friends there, some feel anxious, hopeless and sentimental: emotions familiar to the supermarket's enemies everywhere. One of them writes from Delhi that the vendors who come to her door selling vegetables, milk, flowers and fish are "one of life's greatest pleasures".

They do their rounds on environmentally sound bikes, while supermarket shopping needs cars and car parks. "We fear all this will go," she writes of the old pattern of vendors and neighbourhood shops and bazaars, adding that in India's hierarchical society to shop at a supermarket has an exclusive appeal, a generalised version of the Waitrose cachet, because until now they have specialised in prepared rather than fresh food and have prices (and security guards) to keep out the poor. "In my view," she says, "they are urban, classist, expensive, sell packaged stuff and restrict the right of entry. It could hardly be worse."

Or, of course, better – if you are a time-poor but cash-rich consumer and want to feed easily from the global cornucopia that you feel India has kept at bay out of the state's fear of upsetting the small-farmer and small-trader vote, and its residual antagonism towards foreign corporations that goes back to its foundation.

Shopping in India's pre-cornucopian times could be taxing. Say you lived in Kolkata with a generous family and wanted to treat them, to partly compensate for all the treats they had given you. This was my case. The family were my then in-laws, and sometimes for Sunday lunch, as a break from fish, rice and dal, I'd prepare a bastardised waldorf salad.

The city's old covered market sold most, though not all, the ingredients. I would take a taxi to the market, where a porter carrying a straw basket on his head would attach himself to me as a guide and adviser. His basket would fill with apples from Himachal, limes from Bihar, walnuts from Kabul and cheese from Kalimpong. The really difficult item was the olive oil for the dressing, which could never be found in the market but sometimes at the Great Eastern Stores, a dark and usually empty shop whose trade had foundered when the last of Kolkata's once-large British population decamped in the 1960s, leaving its assistants with memories of tinned prunes, Worcester sauce and other delicacies whose supply lines had dried up.

All this would take a morning. It made an interesting quest for someone like me with an outsider's curiosity and time on their hands. Few Kolkatans, unless they were rich in domestic servants, would have gone to such trouble to prepare something so foreign. The lunch felt like a triumph, and yet Kolkata was one of the world's largest cities, a metropolis by its own account, and had once been the capital of the Raj.

Then, under the fan, we would nap. Sounds from the streets drifted indoors: snatches of Hindi film music, the slap of wet clothes on a laundry slab, a taxi honking, the calls of itinerant food vendors. A whole world waiting, though we didn't know it, for luxury and variety to arrive in the form of the shopping mall, Walmart and Tesco.