India pledges ‘early’ decision on foreign retail

NEW DELHI—India will make an early decision on whether to allow foreign direct investment in its vast retail market, which would be one of the country’s biggest economic reforms, a minister said Wednesday.

Multi-brand global companies such as US-based Wal-Mart currently operate as wholesalers but cannot sell directly to the Indian public, amid fears that big international retail chains could swamp small family-run stores.

“Once recommendations formally reach my table, we will take an early and appropriate policy decision,” Commerce Minister Anand Sharma told parliament, hinting that the decision would be in favor of loosening restrictions.

The decision will be in “supreme” national interest and create millions of jobs across the country, Sharma said.

India’s tight foreign investment rules are aimed at protecting small “mom-and-pop” stores in the sector where less than 10 percent of consumers shop in bigger, well-known department stores.

The minister’s statement came after a panel of top government bureaucrats approved a plan to liberalize the retail sector whose annual sales are estimated at around $450 billion annually.

The policy change would mean foreign retailers could start selling to Indian shoppers through partnerships with Indian retailers and be allowed to hold up to a 51 percent stake in local joint ventures.