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The government is weighing the option of permitting overseas retailers to open stores for selling 'Made in India' products only as it looks to relax the norms for multi-brand retail for attracting more funds and generating more jobs.
Sources said the government is considering permitting foreign supermarket players to open retail stores but only for sale of 'Made in India' products.
Although the current foreign direct investment policy permits overseas players to hold 51 per cent stake in an Indian retail company, the BJP in its election manifesto had opposed foreign investment in the retail segment.
The FDI policy also imposes several conditions for foreign players like mandatory sourcing of goods from MSMEs and a certain percentage of investment in the back-end infrastructure.
These conditions have acted as constraints for foreign retailers.
However, if they would be allowed to retail 'Made in India' goods in the country, these mandatory rules may not be imposed on them, sources added.
Processing Minister Harsimrat Kaur Badal has recently indicated that the government is actively considering a proposal to allow FDI in non-food items, along with food products, under the multi-brand retail policy and a decision may be taken ahead of the mega world food event here in November.
The easing of the policy will be on the lines of the announcements made by Finance Minister Arun Jaitley in the Budget for 2017-18.
Besides, a proposal to allow 100 per cent FDI through automatic route in single brand retail is also under consideration with a view to attracting more global players.
Foreign investments are considered crucial for India, which needs around USD 1 trillion to overhaul its infrastructure such as ports, airports and highways to boost growth.
Foreign investments will help improve the country's balance of payments situation and strengthen the value of the rupee against global currencies, especially the US dollar.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)