The Consumer Affairs Ministry has taken a decision to allow 49 per cent FDI in multi-brand retail. It has written a letter to this effect to the Commerce Ministry.
At present, foreign investors are barred from infusing bucks in multi-brand retail. It is reported that there will be investment of 100 per cent FDI in cash-and-carry operation and 51 per cent in single-brand retailing.
The Ministry has also looked out for a model law to be first put in place at the State-level to protect mom-and-pop stores from the impact of the Big retailers entering the Indian markets.
“Multi-brand retail should be permitted with a cap of 49 per cent… A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing,” the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion in June on allowing 100 per cent FDI in multi-brand retail.
The move would encourage the back-end infrastructure to improve at good pace to evolve retail sector.