Opposition parties and trade unions called the strike after Prime Minister Manmohan Singh last week announced a raft of reforms designed to revive India’s slowing economy, a move that has sparked a furious backlash.
Thousands of policemen were deployed in Kolkata in West Bengal state to prevent violence as shops, markets and offices shut down for the 24-hour strike.
“Train services have come to a halt across West Bengal as strikers squatted on railway tracks,” Samir Goswami, regional public relations officer, told AFP by phone.
Protesters demonstrated throughout Kolkata in support of the strike, with large rallies planned later in the day in New Delhi and many other cities.
Police told AFP that protesters also blocked some national highways.
Activists from the main opposition Bharatiya Janata Party (BJP) and its allies gathered at railway stations across Bihar state in north India and forcibly stopped train services, leaving thousands of passengers stranded.
“Protesters have tried to target trains and bus stations and (we expect) they will also target shops and business establishments,” Ravinder Kumar, a senior police officer in Patna, the capital of Bihar, said.
All private schools in the state were closed because of the strike, but government schools and offices remained open.
The Confederation of All India Traders (Cait) forecast that 50 million people would participate in the protest against retail reforms unveiled by Singh.
Many small business owners and workers fear that the arrival of large-scale foreign supermarket chains will lead to drastic job losses as India’s supply chains and shopping habits are transformed.
Singh has been buffeted by reaction to the reform package and a sharp rise in diesel prices, with a key West Bengal-based coalition party quitting the government and demanding the policies are reversed.
The arrival in India of chains such as Walmart, Tesco and Carrefour is expected to herald a consumer revolution with shoppers moving from small, neighbourhood stores to large, out-of-town supermarkets.
The government and many industry leaders argue that a modern retail system would improve value and choice for Indian consumers, create new jobs and enable farmers to reduce wastage.
But Singh, weakened by the worst quarterly GDP figures in three years and a series of corruption scandals, faces a major challenge to push through the reforms and boost the economy before elections due in 2014.
Truck and bus drivers are also expected to strike on Thursday over a 12 per cent hike in subsidised diesel prices as the government tries to tackle its widening fiscal deficit.
Mumbai, the country’s financial capital, was largely unaffected by the strike as local political parties declined to support the action.