The Planning Commission of India, in its report on Wednesday, said that the government should clarify the issue of allowing foreign investment in retail trade in the country.
“Though 100 percent foreign investment is allowed in cash-and-carry wholesale trading, there is no dividing line that distinguishes this activity from retail trading. Neither there is any specific regulation to prevent consumers to make wholesale purchase meant for their own consumption,” the report said.
Discussing various ways in which FDI can be allowed in India, the report said, “The foreign retail chains, which develop local supplies according to their standards, can also source the products from India.”
India currently allows 51 percent foreign direct investment (FDI) in single-brand retail and 100 percent in cash-and-carry wholesale trading. It has no provision of FDI in multi-brand retailing.
Permitting FDI in multi-brand retailing has been a major issue with the government as it has faced widespread opposition from small traders, farmers and hawkers.