The Indian government has changed its rules on foreign investment in the country’s wholesale cash-and-carry channel to allow overseas-backed wholesalers to sell to their retail counterparts.

For example, under the new rules, the Bharti-Wal-Mart wholesale venture will now be able to sell to Bharti Retail. However, such trade should not exceed 25% of the total turnover of the wholesale venture.

The Indian government made the change in “response to requests for simplification of the guidelines received from stakeholders”.

The Government also clarified its position on downstream investment through internal accruals, saying that “downstream investments through internal accruals are permissible, subject to following of guidelines for downstream investments by Indian companies which are ‘owned and/or controlled by non-resident entities'”.

The changes came into effect on 1 October.

Additionally, the Indian government has released a discussion document on foreign direct investment in retail and is seeking comment on the proposed relaxation of the law by 15 October.