The Indian government may allow retail stores such as Walmart and Tesco to come in the industry without any of those conditions provided that their multi-brand retail venture is less than 50%. The condition was the biggest dilution in retail FDI policy that was announced last September.
The finance ministry of the country proposed that a foreign multi-brand retailer could be allowed to enter India if it does not hold a majority stake in the Indian venture. The finance ministry added that the current policy has failed to stimulate investors to start investing in the Indian market.
On Monday, the proposal is likely to be discussed as the inter-ministerial meeting of bureaucrats was set to deliberate.
The current policy allows 51% FDI in the multi-brand sector. This is subjected to stiff riders including huge minimum investment to back-end infrastructure. A mandatory 30% sourcing was also proposed to be required from small and medium local companies.
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