The government has launched discussions between ministries about opening multi-brand retail to foreign direct investment (FDI).
It is learnt that the department of industrial policy and promotion (DIPP), the government body responsible for framing foreign investment policy, has written to the finance ministry on the issue and is also in talks with the agriculture ministry about the pros and cons of the move. It is expected that DIPP will soon circulate a discussion paper to build consensus on the issue.
The department, a key offshoot of the commerce and industry ministry, has also floated a proposal to allow 100 per cent FDI in defence production.
The government allows up to 51 per cent foreign investment in single-brand retail, but has so far been skittish about opening up multi-brand retail. The rules allow foreign multi-brand retailers only through franchise agreements with local players.