New Delhi: India will move to open up the multi-brand retail sector and allow foreign direct investment (FDI) up to 51%, with at least half the funds invested in infrastructure such as cold storage, newspapers reported on Friday.
Global retailers such as Wal-Mart Stores, Carrefour, Tesco and Metro AG have long sought greater access to a fast-growing but restrictive Indian retail sector that is dominated by mom-and-pop operators.
An inter-ministerial group headed by Kaushik Basu, chief economic adviser in the finance ministry, has recommended allowing foreign direct investment in multi-brand retail to tame inflation and cut farm gate and retail price differences.
His recent comments gave a strong signal that a decision could be made soon to open up the $450 billion retail sector to foreign investment, though it has been pending for years and faces strong political opposition.
India currently allows 51% FDI in single-brand retail and 100% in wholesale cash-and-carry operations.
The commerce and industry ministry has floated a proposal to open the supermarket sector by 51%, the Mail Today reported on Friday.
The Hindustan Times reported that retailers will have to source at least 30% of manufactured items from smaller companies and sell one third of their goods to small retailers.
The proposal is expected to move to the cabinet shortly for a formal approval, the Hindustan Times said.
R. P. Singh, industry secretary, declined to comment when asked about the reports.