The government is thinking of granting 51% FDI in multi-brand retail.
Under the existing rules, upto 51% foreign investment is permitted in single brand product.
FDI upto 100% is allowed in wholesale cash-and-carry trade.
However, the permission will come with stiff riders such as the retail store should be located in cities with a min. population of one million. There are also rules for minimum capitalisation and minimum built up area. Also there are rules to encourage procurement from local manufacturers.
India has 15 million retail outlets. Only 4% of the outlets are bigger than 500 sq feet and the remaining 96 per cent are in unorganised sector.
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