A new policy framework that allows states to regulate the level of foreign direct investment (FDI) they permit in multi-brand retail could help the government open up the sector.
It has being trying unsuccessfully for a number of years to free-up India’s US$450bn retail sector to international supermarket operators, such as Walmart, Tesco and Carrefour.
The Hindustan Times has reported the new policy framework, which allows up to 49 per cent FDI in multi-brand retail, will enable states to set their own rules governing the entry of foreign retailers.
Under the policy the central government’s role would be confined to approving investment proposals and ensuring terms of entry are met.
According the newspaper, these would include investment of no less than US$100m in any multi-brand retail project and ensure at least one third of all sales are to small retailers, either directly or through wholesale outlets set up for this purpose.
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