Aug. 27 – India’s Consumer Affairs Ministry is recommending that 49 percent foreign direct investment be allowed in the multi-retail industry with an emphasis on developing back-end operations.

The ministry said that more foreign investment should be allowed on the condition that a model law be in place to help shield small businesses. Moreover, the majority of foreign investment in multi-brand retail should focus on improving back-end infrastructure, in addition to agricultural processing and logistics.

FDI in multi-brand retail is currently banned in India and only 51 percent in single-brand retail and 100 percent in cash-and-carry operations are allowed.

The Consumer Affairs Ministry’s recommendation is in response to a June consultation paper issued by the Department of Industrial Policy and Promotion calling for 100 percent FDI in multi-brand retail.

The ministry is also proposing the implementation of the National Shopping Mall Regulation Act that would further manage the retail sector.