India opens part of retail sector to foreign stores

An Indian shopkeeper in his store Those opposed to opening up the retail sector to supermarkets say it will hurt small businesses

Related Stories

The Indian government has allowed single-brand foreign retailers to open stores, clearing the way for companies such as Starbucks and Ikea.

Retailers can now invest beyond the previous limit of 51% ownership.

However, they are required to buy 30% of their goods from domestic small industries.

The move is a step forward after plans to open up the lucrative supermarket, or multi-brand sector, were delayed following a political outcry.

The cabinet approved the plan to allow wholly foreign-owned "single brand stores" in December. A government notification was issued late Tuesday announcing its implementation.

Large domestic retailers were happy with the agreement, which was pushed through by the government on Tuesday.

"This is a welcome move with a clear potential to lift the general mood in the economy," said Rajan Bharti Mittal, managing director of Bharti Enterprises which partners with Wal-Mart supermarkets.

Previous attempts to open up the retail sector have met with mass protests in the country and within the government.

Prime Minister Manmohan Singh reversed a decision in December to let multi-brand companies such as Wal-Mart and Carrefour to open supermarkets in India.

Those against the move said it would hurt small local businesses.

Mr Singh has said he will renew the attempt to open up the sector after regional elections in 2012.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories


Features & Analysis

  • Dr Mahinder Watsa Dr Sex

    The wisecracking 90-year-old whose advice column is a cult hit

  • Payton McKinnonKilling heat

    Why so many children die in hot cars

  • USA fanSoccer punch

    Has the US finally fallen in love with the beautiful game? BBC Sport

  • Cooling towers at the Temelin nuclear power station, Czech Republic, 2011Nuclear links

    The EU's dependence on Russian-designed power plants

Elsewhere on the BBC

  • Kyoto.Falling for Kyoto

    Acclaimed writer Pico Iyer describes an enchanting first stroll through the city


  • (File photo) Usain BoltClick Watch

    Challenging the world's fastest man to a virtual race over 40m – can you keep up?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.