The head of the Retailers Association of India, Kumar Rajagopalan, says foreign retail investors will transform India into a modern consumer society. He says the fears that the large stores will edge the millions of small stores out of business are unfounded.

“The average size of a retailer in this country has been 180 square fee," he says. "They have got hardly any costs of operations. They are themselves sitting at the store. And, they know who their customers are, they are very visible to the customer and those cannot be easily substituted at least for the next 10 years time. Because the need for having the nearby store with capability to deliver at home, give you credit, recognize you is still going to be there," says Rajagopalan.

But political opposition to the measure is unlikely to die down soon. On Thursday, several trade unions, backed by political parties, have announced a nationwide shutdown.

Officials say the government is braced to face the storm and has no plans to back down from the measure.