The government has moved a formal proposal to allow foreign direct investment of up to 51% in multi-brand retail stores although with a few riders. At present, FDI in multi-brand retail business is prohibited in India. The large deep discount stores, such as Walmart, Tesco and Carrefour, will be all owed only in 10-lakh-plus cities and only in those states which allow FDI in multi-brand retail.
According to the proposal, piloted by the department of industrial policy and promotion last month, at least 50% of the total investment should be made for creating back-end infrastructure, such as building cold storage chain and warehouses. And the retailers will have to keep the RBI and the Foreign Investment Promotion Board in the loop in this regard.
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