Under the recommendation, foreign investors will be allowed in the Indian retail market through partnerships with local retailers, taking up to a 51 per cent stake in such ventures.
Previously, successive government have resisted opening up the country’s multi-brand retail sector because of fears that around 15m traditional ‘kirana’ stores would not be able to compete with the retail giants.
Consequently, under current rules, only single-brand retailers such as McDonald’s can invest up to 51per cent through international investments, with multi-brand retailers restricted to wholesale B2B operations.
If the recommendation passes the cabinet of ministers and then the Parliament, the Indian food retail sector will see a major boost and provide more opportunities to food manufacturers.