The vote is expected Friday in the Rajya Sabha, where the government does not have the numbers.

In a thumbs-up for for the second generation of economic reforms, shepherded by the prime minister, the government also won another motion on amendments to the Foreign Exchange Management Act (FEMA) to facilitate its initiative.

Both the motions had been moved by the opposition. The motion on the government's decision to allow 51 percent foreign direct investment (FDI) in multi-brand retail, which would allow global supermarket chains to set up shop in India, was moved by the BJP and the CPI-M. The second one opposing amendments to FEMA was moved by the Trinamool Congress.

The government may have won this crucial vote, but the point was not lost on watchers of the political scene as it owes its victory to internecine rivlary between two key Uttar Pradesh parties, Samajwadi Party (SP) and the Bahujan Samaj Party (BSP), which prop the ruling UPA from outside.

The BSP and the SP strategically walked out of the house before the vote, ensuring that government sailed through the challenges.

The halfway mark needed to win the votes was reduced with the SP's 22 MPs and the BSP's 21 abstaining. Propelled by the unlikely Mulayam Singh Yadav-Mayawati combination, the government won the FDI motion with a 35 vote margin - 218 votes for the opposition motion and 253 against with 471 of the 544 members present in the house.

The FEMA motion was won by 30 votes - the opposition getting 224 votes and the government 254.

A beaming Manmohan Singh, the prime mover behind the contentious FDI in retail initiative and the larger economic reform process, said the decision "has the approval of the house" and underlined that the government is confident of its numbers in the Rajya Sabha.

"FDI has approval of the house," Manmohan Singh told reporters after vote.

Industry lobby's hailed the vote, with Confenderation of Indian Industry president Adi Godrej saying FDI in retil "would lead to capital infusion in the country, which would help farmers and customers."

The Rajya Sabha will discuss the issue Thursday-Friday and vote on Friday.

The government touted the vote as a victory of pragmatism over ideological posturing. "It was a contest between reform and retribution. It was a victory of pragmatism over ideological blinkers. And ultimately, reform and pragmatism have won," Information and Broadcasting Minister Manish Tewari said.

"We are very happy. We have the support of the house," said a beaming Communications Minister Kapil Sibal, while lauding the country's "vibrant democracy".

A defeated Bharatiya Janata Party leader Sushma Swaraj slammed Mulayam Singh Yadav for walking out of the house and condemned the UPA's "arrogance of power".

The SP, which had said earlier in the morning that it was against FDI but would not do anything to "trouble the government", said the move was "anti-farmer".

"Five crore (50 million) people in retail trade will be destroyed. This decision has ignored the interests of 20 crore (200 million) farmers and their families. The decision on FDI was taken under pressure of foreign companies. This is the reason the party boycotted it," Mulayam Singh said.

"This is not about helping or harming the government. The whole party and MPs had decided to stage a walkout. This was decided by the party and the SP will continue to oppose every wrong decision of the government," he said.

The decision to allow FDI in multi-brand retail is expected to open the doors for major global majors like Wal-Mart, Carrefour and Tesco.