India’s Cabinet decided Thursday to allow more foreign direct investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers.
Top retailers such as Wal-Mart, Carrefour, Tesco and IKEA have long lobbied for a chance to build stores in the country of 1.2 billion people. Foreign multibrand retailers have Indian partners in wholesale operations but no retail presence.
Multibrand retail stores could be built with up to 51 percent foreign direct investment under the change the Cabinet approved Thursday. The Cabinet also allowed 100 percent foreign direct investment of single-brand retail operations, up from 51 percent.
Advocates see the move as a way to strengthen India’s almost absent food supply chain — which is so beset by spoilage, poor infrastructure, hoarding and middlemen that the government estimates some 30 percent of the country’s produce rots while food costs soar and tens of millions of people go to bed hungry each night.